The Litecoin (LTC) price is currently undertaking its fourth attempt to break through a significant resistance zone. With each touch, the strength of the resistance diminishes, raising the prospect of an eventual successful breakout. Given this context, is it possible for the LTC price to surge toward $130 following a successful test of $100?
In addition to the price action, the wave count and RSI reading both indicate a bullish outlook, further enhancing the chances of a successful breakout.
Mostly Bullish Outlook and Promising Signals
The LTC weekly time frame technical analysis reveals an overwhelmingly bullish outlook for Litecoin (LTC), supported by several compelling factors.
Firstly, since the end of May 2022, LTC has been trading within an ascending triangle pattern. Ascending triangles are widely regarded as bullish formations, implying that a breakout from this pattern is the most probable future price scenario.
Furthermore, LTC has repeatedly tested the crucial $100 resistance level, which increases the likelihood of a breakout as resistances tend to weaken with each touch.
Encouragingly, LTC has recently surpassed the $100 resistance, but it is crucial for the price to sustain this level and transform it into solid support.
Additionally, the weekly Relative Strength Index (RSI) indicator leans towards a bullish bias. Traders commonly employ the RSI as a momentum gauge to determine whether a market is overbought or oversold, aiding in decisions related to accumulating or selling an asset.
In the case of LTC, the RSI reading is above 50 and continues to rise, indicating an advantageous position for the bulls.
Furthermore, a hidden bullish divergence has materialized (depicted by the green line), a bullish continuation pattern where a decrease in momentum accompanies a price increase. This pattern often signifies the resumption of the prevailing bullish trend.
Considering these factors, the LTC market appears primed for further upward movement. Traders and investors should closely monitor the price action, particularly the sustainability of the $100 support level and the RSI’s bullish stance, to capitalize on potential opportunities.
LTC Daily Analysis
A comprehensive analysis of the daily time frame for Litecoin (LTC) yields a resolutely bullish outlook, primarily attributed to the wave count and the application of Elliott Wave theory.
Elliott Wave theory serves as a valuable tool for technical analysts, aiding in the identification of recurring price patterns and investor psychology, thereby facilitating trend direction predictions.
Based on the most probable wave count, LTC is currently positioned within wave three (white) of a five-wave upswing.
Historically, wave three tends to be the most substantial and sharpest among the five waves, implying that the rate of LTC’s upward momentum is likely to intensify in the near future, assuming the count is accurate.
Remarkably, the corrective wave two (highlighted) exhibits a perfect alignment with the count, particularly evident in the 1:1 proportion of waves A: C (black). If the wave count holds true, LTC is poised to break out and target the next resistance level at $130.
However, it is crucial to note that a bearish trend would emerge if the LTC price falls below the wave two low (red line) at $71. Such a scenario would invalidate the bullish forecast, potentially leading to a decline toward $50.
Given these insights, traders and investors should closely monitor LTC’s price action, paying special attention to the validation of the wave count and the critical support levels.
This analysis offers a bullish prediction, but market conditions can shift, warranting cautious decision-making and risk management.