Technical Analysis and Market Entry: Litecoin Bulls Have a Platform to Retest Breached Support
- The Litecoin (LTC) price is attempting to stage a rebound, after taking a beating from sellers since late June.
- LTC/USD bulls will be looking to retest a breached trend line of support.
LTC/USD: Recent Price Behavior
The Litecoin price is attempting to stage a rebound after a period of selling pressure since late June. LTC/USD managed to find some buying interest at the $80 mark between 16-17th July. It was the lowest the price had fallen to since 11th May, where LTC picked up bullish momentum as part of the most recent run higher.
LTC/USD has been at the complete mercy to the market bears from 23rd June following a strong run to the north which had commenced early May. The price climbed over 125% from the start of this run down at $66, pushing to heights of $146. It was the highest LTC had been since May 2018, running into a known area for sellers.
The most recent fall from late June was triggered following a weekly evening star formation, indicating a change in trend from the bull run. LTC/USD tumbled for four straight weeks, losing some 38% in that process. It was the longest consecutive run of weekly losses seen on record so far for LTC/USD specifically.
Critical Trend Line
LTC/USD was previously being supported to the upside by an ascending trend line, which had been in play since very late April. On each occasion the price dipped and touched the support, compelling the market bulls to buy. When Litecoin lost upside momentum towards late June, there were several daily tests from the bears trying to force a breach.
On 10th July, a breakout to the downside came into play; given the significance of the trend line, the move was exacerbated south. A substantial wave of selling pressure was observed, dropping some 14% in one move. The drop continued until LTC/USD was able to stabilize around $80, as earlier described.
Should momentum to the upside maintain its current course, then eyes will be on a retest of the breached ascending trend line. It could very well act as a new area of resistance for the bulls; a rejection would complete the technical breakout retest scenario. In terms of the likely new barrier, this can be seen tracking around $120.
Given the strong proven demand zone in bringing in buying interest at $80, the potential for further upside is there. In terms of targets, the first is $120-$125, the above-broken trend line, followed by $140-$145, where LTC/USD topped in June. Stops would be placed just below the $80 buying zone at $74.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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