Despite the bearish trend, LTC is now approaching an area of converging support levels, which could be a springboard to trigger a significant rebound.
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Litecoin has not held above resistance
According to the results technical analysis of the weekly chart, the picture for LTC looks pessimistic.
According to the results of the technical analysis of the weekly chart, the picture for LTC looks pessimistic.
Price dynamics indicate a bearish trend due to the price deviation above the $100 resistance area. The LTC exchange rate temporarily exceeded the $100 mark (red circle), recognizing it as resistance. Such deviation is generally considered a negative signal and often precedes significant declines. Such was the case with LTC, as the price fell to a low of $79.29.
And that’s what happened to LTC.
The price of LTC is now approaching the long-term ascending support line at $76. It has been present on the chart since June 2022 and, accordingly, has been determining the angle of the upward movement all this time.
So, the trend can be considered bullish as long as the price is trading above this line. A return to the $100 resistance area would mean a rebound of 20%.
A bearish breakout, on the other hand, could take the price down another 20% to reach the $100 support area.
On the other hand, in case of a bearish breakout, the price could fall another 25% and reach the $64 support area.
Source: TradingView
In addition, the weekly RSI supports the idea of a continuation of the downtrend. This momentum indicator just dipped below the 50 mark after it signaled a bearish divergence (green line) amid the previous deviation. This also speaks in favor of a bearish trend.
LTC prediction: why the price fell after the halving
The Litecoin network experienced its third halving on August 2. It reduced the LTC block reward from 15 to 6.25, increasing the scarcity of the asset. However, despite the deflationary significance of this event, the price of LTC did not react with a rise in price. It’s possible that the reason for the sell-off was the miners.
Miners.
Despite the current drop, there is still hope for a rebound in LTC. Litecoin has been trading inside an ascending parallel channel since the beginning of February. It is currently in close proximity to the channel support line, which coincides with the previously highlighted long-term upward support line. Due to this confluence, this is a very strong support area.
In addition, the wave analysis confirms the possibility of forming a local bottom. It is possible that the whole price movement inside the channel is a part of the big corrective structure A-B-C. If this is indeed true, then the ratio of waves A:C will be exactly 1:1. This is the most common ratio in such structures.
If this wave scenario is correct, the price of LTC will bounce sharply from the channel support line and rise towards the $100 resistance area.
If this wave scenario is correct, the price of LTC will bounce sharply from the channel support line and rise towards the $100 resistance area.
But a bearish breakout from this channel would invalidate this prediction and likely send the price to the previously mentioned $64 support level.
A bearish breakout from this channel would invalidate this prediction and likely send the price to the previously mentioned $64 support level.
Source: TradingView
Hence, the future outlook for LTC will depend on whether the price makes a bearish break of the long-term ascending support line or bounces off it. A rebound could trigger a 20% rise to $100, while a breakdown could trigger a 25% drop to $64.