Litecoin (LTC) has experienced a significant rebound from long-term horizontal resistance and recently broke through the diagonal support level, causing some concern regarding its price trajectory.
The current decline has made it difficult for the price to find support, leaving investors wondering if the nearest Fibonacci level will play a role in stabilizing the market.
Technical analysis of the weekly chart indicates that LTC has been on a steady rise since June 2022, hitting a high of over $100 in February.
However, the price failed to make a clean break of the $100 horizontal resistance area, resulting in two bounces that may be interpreted as bearish signals.
These bounces created a double top pattern on the chart, which is considered a bearish sign, and the last bounce resulted in a bearish absorption candle that neutralized the previous rise.
If the decline continues, LTC may find support around the long-term uptrend line at $74.
On the other hand, if the market gains momentum and makes a bullish breakout, the next bulls’ target might be the $130 area.
The daily timeframe reflects a bearish picture, supporting a scenario of further decline.
The price made a bearish break of the short-term upward support line that has been present on the chart since March, indicating the beginning of a correction.
Additionally, the daily RSI has fallen below the 50 mark and is declining, suggesting a further bearish trend for the coin.
If the decline persists, the nearest support will come into play between $73 and $80 (Fibonacci levels of 0.618-0.786 retracement).
A more likely candidate for a potential bottom is the $73 level, as it also coincides with long-term upward support.
However, closing the week above $100 would cancel the bearish forecast for LTC and signal a bullish trend, potentially taking the price to $130.
Overall, the current market trends suggest caution and a need for careful observation of LTC’s price movements.