Technical Analysis and Market Entry: Litecoin Remains Vulnerable to Another Bear Attack Under $100

Litecoin
  • The Litecoin price has managed to catch some support, following a bearish pennant breakout to the south.
  • Technically, vulnerabilities appear to be to the downside, while LTC/USD continues to trade below $100. 

LTC/USD: Recent Price Behavior

Litecoin’s price over the last couple of sessions is attempting to stabilize following a breakout to the downside from a bearish pennant. LTC/USD has been moving within consolidation mode on the back of the hard fall that came into play late June. The price fell some 45% from $145 down to $76; this was observed between 22nd June to 16th July. 

LTC/USD price action, as noted, began to trade within a narrow range, forming a triangular/pennant structure. Given this price behavior, it was increasingly subject to a breakout to the downside.

The bears managed to force a breach of the pattern on 7th August, and a daily closure was observed below. Litecoin has since caught some support in a known demand zone, the $85-$75 range, with eyes on a potential retest. 

LTC/USD daily chart.

No Development for Litecoin 

There has recently been much discussion across the crypto community regarding the lack of development with Litecoin. Leaked messages of a Litecoin developer chat showing no evidence of active development regarding awaited privacy features has been circulating recently. It comes as Litecoin users were hit with a large-scale privacy-compromising attack, as announced by Binance. 

The leaked messages were within a Telegram chat, where the Director of the Litecoin Foundation Franklyn Richards expressed much frustration. His annoyance was around the lack of any solid development progress on the awaited upcoming privacy improvements and vague answers from the development team.

He said:

“What would happen if I right now told people actually in public Litecoin has zero active development and I haven’t heard anything from the lead developer in months?”

The Litecoin founder Charlie Lee responded:

“The honest truth is that no one is interested in working on Litecoin protocol development work. At least no one technically competent. You can’t just throw money at this problem. This is true for Litecoin since the beginning.”

Trade Recommendation

Litecoin remains vulnerable to the downside following the technical breakout of a bearish pennant structure. The retest will be the potential confirmation for a short bias; the pennant acting as resistance could invite a fresh wave of selling pressure. Moves for sellers could potentially kick in around the $95-$100 range. 

Upon entry following a bearish daily rejection, targets to the downside would be the $65-$55 price area. LTC/USD last traded down at this zone on 29th April, when bullish momentum picked up decent pace. Stops would be placed just above the pennant and a supply area at $110. 

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.

Featured image courtesy of Shutterstock.

Author:
Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.