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.
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.
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.”
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’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.
