LTC Price

Litecoin ‘head fake’ rally? LTC price technicals hint at 65% crash

LTC price could drop alongside riskier assets as macro analysts sound a bull trap alarm over this potential “head fake” recovery.

Litecoin (LTC) has rebounded by 130% to almost $100 after bottoming out near $40.50 in June 2022. The primary reasons include broadly improving risk-on sentiment and euphoria around Litecoin’s upcoming halving in August 2023.

However, technicals suggest that LTC may wipe out most of these gains in the coming months.

LTC price paints giant bear flag 

Litecoin stands to pare its gains mainly due to a giant bear flag on the weekly chart.

A “bear flag” is a bearish continuation pattern that occurs when the price consolidates inside an ascending, parallel channel after undergoing a strong downtrend. It resolves after the price breaks below its lower trendline with a rise in trading volumes.

Litecoin has been painting a similar pattern since early June 2022. Previously, the LTC/USD pair had undergone a 70% price correction from $130 to $40.50. Thus, from the technical perspective, it would resume its downtrend course if its price breaks below the lower trendline.

LTC/USD weekly price chart featuring bear flag breakdown setup. Source: TradingView

As a rule, a bear flag breakdown move prompts the price to fall by as much as the previous downtrend’s length. Applying the same setup to Litecoin brings its bear flag downside target to nearly $30.50, or 65% lower than the current LTC price.

Litecoin price “head fake”?

As said earlier, Litecoin‘s price recovery has primarily occurred in line with similar moves across the risk-on market due to cooling inflation.

For instance, the Nasdaq-100 stock market index has risen approximately 15.50% between October 2022 and January 2023. Similarly, Bitcoin (BTC) has rallied by more than 50% since its November 2022’s low of around $15,500.

The weekly correlation coefficient between Litecoin and the Nasdaq-100 has been mostly positive at 0.35 on Jan. 27. Similarly, the correlation between Litecoin and Bitcoin is now around 0.21.

Litecoin’s weekly correlation coefficient with Nasdaq-100 and Bitcoin. Source: TradingView

But Mark Haefele, the chief investment officer at UBS Global Wealth Management — along with other many other analysts — has noted that the ongoing risk-on rally could be a “head fake.” In simple words, the ongoing Litecoin rally, under the influence of its risk-on counterparts, could be short-lived. 

Independent market analyst Capo of Crypto also agrees, noting:

“The way the upward movement is happening, the way [higher-timeframe] resistances are being tested… it clearly looks manipulated, no real demand. Once again, the biggest bull trap I’ve ever seen.”

Bullish scenario for Litecoin

However, not everyone is bearish on risk assets such as Litecoin. Popular market analyst Rekt Capital sees Litecoin rallying toward $160 in the coming weeks, citing a monthly chart setup as shown below.

LTC/USD monthly price chart. Source: TradingView

Notably, the chart shows LTC‘s price undergoing a strong rebound move after testing a multiyear ascending trendline resistance inside the $40 to $50 area, which could qualify it for a further uptrend toward the $120–$160 range.

These upside targets have previously acted as supports and resistances. Breaking this key resistance could therefore invalidate the bear flag setup, which happens 54% of all time, according to research by veteran investor Tom Bulkowski.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Litecoin eyes $100 after ‘rare’ LTC price breakout

MoneyGram’s decision to integrate Litecoin into its crypto services and the coin’s upcoming halving event has served as catalysts behind LTC’s price rally.

Litecoin (LTC) could rise another 20% amid a rare trend reversal breakout that has already resulted in LTC outperforming most crypto assets in recent days.

LTC’s not-so-bearish symmetrical triangle

LTC’s price broke out of what earlier appeared to be a bearish symmetrical triangle.

Symmetrical triangles are trend continuation patterns, meaning breaking out of their range typically prompts the price to move in the direction of their previous trend. 

Litecoin formed a symmetrical triangle pattern between May and November after dropping 70% to nearly $40 in the prior trading sessions. Ideally, the LTC/USD pair could have resolved the pattern by breaking below its lower trendline.

But instead, it broke above the upper trendline in early November, as shown below. According to Robert D. Edwards and John Magee, the authors of Technical Analysis of Stock Trends, the breakout move is rare, given only 25% of symmetrical triangle breakouts have historically resulted in trend reversals.

LTC/USD three-day price chart. Source: TradingView

Litecoin followed up with its symmetrical triangle reversal move decisively and now eyes a run-up toward $100, or another 20% by December 2022.

This upside target is measured after calculating the distance between the triangle’s upper and lower trendline and adding the output to the breakout point (around $58 in Litecoin’s case).

Why is Litecoin price up?

Litecoin’s symmetrical triangle breakout move started in late October. It coincided with MoneyGram’s announcement that it would enable users to purchase, store and use LTC alongside Bitcoin (BTC) and Ether (ETH) for payments.

LTC/USD three-day price chart. Source: TradingView

The LTC breakout lost momentum due to FTX’s collapse in the first week of November and its negative impact on the broader crypto market. But Litecoin resumed its upward trend amid speculations about its reward halving in the summer of 2023.

Related: Litecoin hits fresh 2022 high versus Bitcoin — But will LTC price ‘halve’ before the halving?

“Litecoin tends to rally in the months leading up to the halving,” noted market analyst The Digital Trend in a SeekingAlpha op-ed, adding:

“Then, the price tends to stabilize before entering a lengthier and more substantial bull market. Then, around halfway through the cycle, Litecoin enters a bearish/distribution phase like Bitcoin.”

LTC/USD price performance before and after halving. Source: TradingView/The Digital Trend

Litecoin’s price could reach $180 by July if the halving fractal plays out as intended, as Cointelegraph previously reported.

The bearish take

Conversely, Litecoin can see a short-term correction, as its three-day relative strength index (RSI) is turning “overbought.” The trigger for the downside move could be the RSI crossing above 70 from its current reading of 68, as shown below.

LTC/USD three-day price chart. Source: TradingView

LTC’s price downside target comes to be at around $40 in the event of a correction trend, down about 50% from current price levels.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Litecoin hits fresh 2022 high versus Bitcoin — But will LTC price ‘halve’ before the halving?

Litecoin diverged from the broader crypto market downtrend in the months leading up to its halving in August 2023.

Litecoin (LTC) has emerged as one of the rare winners in the ongoing cryptocurrency market meltdown led by the FTX exchange’s collapse.

LTC price outperforms BTC, ETH

The 2011-born altcoin rallied nearly 16% month-to-date (MTD) to reach $62.75 on Nov. 22, outperforming its top rivals, Bitcoin (BTC) and Ether (ETH), which lost approximately 25% and 30%, respectively, in the same period.

LTC/USD daily price chart. Source: TradingView

Furthermore, the LTC/BTC price also rallied to new heights, gaining 50% in November to establish a new yearly high of 0.003970 BTC on Nov. 22.

As Cointelegraph reported, Litecoin diverged from the broader cryptocurrency market downtrend earlier this month with its halving slated for August 2023. LTC has also received an endorsement from none other than Michael Saylor for being a Bitcoin-like “digital commodity.” 

Nonetheless, signs of bullish exhaustion are emerging.

Litecoin price fractal hints at 50% correction

Litecoin’s rally versus Bitcoin has made the LTC/BTC pair overvalued, according to its weekly relative strength index (RSI) reading.

Notably, LTC/BTC’s weekly RSI, which measures the pair’s speed and change of price movements, surged above 70 on Nov. 22. An RSI reading above 70 is considered overbought, which many traditional analysts see as a sign of an impending bearish reversal.

Historically, Litecoin’s overbought RSI readings versus Bitcoin have been followed by major price corrections. For instance, in April 2021, the LTC/BTC RSI’s climb above 70 met with a strong sell-off reaction, eventually pushing the pair down by 75% to 0.001716 BTC by June 2022.

Similarly, an overbought RSI in April 2019 led to a 70% LTC/BTC price correction by December 2019.

The same RSI fractal now hints at Litecoin’s possibility of undergoing a 50% wipeout versus Bitcoin if coupled with LTC/BTC’s multi-year descending channel pattern, as shown below.

LTC/BTC weekly price chart. Source: TradingView

Typically, LTC/BTC turns overbought after hitting the channel’s upper trendline, which follows up with a correction toward the lower trendline.

As a result, the pair risks dropping to or below 0.001797 BTC by December 2022 if the fractal repeats, down more than 50% from the current price levels. 

Conversely, a decisive breakout above the upper trendline could have LTC/BTC test its 200-week exponential moving average (200-week EMA; the blue wave) at 0.005319 BTC, up 30% from current price levels, as the next upside target.

LTC/USD pair “bear flag” 

Litecoin is eying a similar price crash versus the United States dollar as it paints a bear flag pattern on the weekly charts.

Related: Cathie Wood’s ARK Invest adds more Bitcoin exposure as GBTC, Coinbase stock hit new lows

Bear flags are bearish continuation patterns that appear when the price consolidates higher inside a parallel, ascending channel range after a strong move lower (called flagpole). They resolve after the price breaks below the lower trendline and falls by as much as the flagpole’s height.

LTC/USD weekly price chart. Source: TradingView

LTC has been trading inside the bear flag range, eyeing a breakdown below its lower trendline support of around $55. The bear flag downside target is around $32.40 if it breaks decisively below the said support — i.e., a 50% decline by December 2022. 

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Litecoin pre-halving fractal hints at 200% LTC price rally by July 2023

Litecoin’s momentum indicators signal extremely oversold conditions, hinting at the formation of a potential market bottom.

The price of Litecoin (LTC) could skyrocket by up to 200% by July 2023, coinciding with its halving event, reducing miner block rewards by 50%.

Litecoin has bottomed out?

Litecoin has undergone two halvings since its launch in October 2011. The first one occurred in August 2015, which reduced its block reward from 50 LTC to 25 LTC. The second happened in August 2019, which slashed the 25 LTC reward to 12.5 LTC.

Interestingly, each Litecoin halving event occurred after a volatile LTC price cycle, namely an enormous price pump, followed by a similarly massive correction, a price bottom, and recovery to a local top.

After the Litecoin halvings, LTC’s price corrected from its local top, established another bottom and followed it with another massive price rally to a new record high, as shown below,

LTC/USD weekly price chart featuring halving fractals. Source: TheScalpingPro

Litecoin’s third halving is scheduled to occur sometime in July 2023. Meanwhile, market analysts are already pointing out that LTC’s price is undergoing the same pre-halving trajectory as before the 2011 and 2019 events, now in the bottoming-out stage.

The Scalping Pro, an independent market analyst, added a dose of MACD and RSI momentum indicators to support the bullish outlook. Momentum indicators determine an asset’s oversold and overbought conditions to predict potential trend reversals.

On a weekly timeframe, LTC’s RSI and MACD have turned extremely oversold, which coincided with market bottoms ahead of the previous halving events. Thus, the analyst considers it a strong cue for another major LTC price rally.

Will LTC price reach $180 by July 2023?

Litecoin may see a new local top if it has indeed bottomed out near $40 in June 2022.

Related: Research report outlines why the crypto market might be on the verge of a reversal

Drawing Fibonacci retracement graphs between Litecoin’s pre-halving correction peaks and bottoms highlights the likelihood of testing the 0.236 and 0.382 Fib lines as their upside targets.

LTC/USD weekly price chart featuring Fib line targets. Source: TradingView

For instance, in 2011, Litecoin established its local top at the 0.236 Fib line near $10 in July, six months after bottoming out near $1.31.

LTC/USD weekly price chart featuring pre-1st-halving trend. Source: TradingView

In 2019, LTC price formed its local top at the 0.382 Fib line near $340 in June after bouncing from around $21 in December 2018. 

LTC/USD weekly price chart featuring pre-2nd-halving trend. Source: TradingView

In the current scenario, Litecoin’s 0.236 and 0.382 Fib lines coincide with approximately $130 and $180, respectively.

LTC/USD weekly price chart featuring pre-3rd-halving trend. Source: TradingView

These levels could become potential local tops if Litecoin confirms $40 as its bottom. In other words, a 100%-200% price rally by July 2023 when measured from the current price levels.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.