Technical Analysis and Market Entry: LTC/USD Bulls Make Critical Breakout With Further Recovery Eyed
- The Litecoin price appears to be back on the path to recovery, as it rallies for three consecutive weeks.
- LTC/USD bulls forced their way out of a bearish flag structure, which was subjecting the price to further downside.
LTC/USD: Recent Price Behaviour
Litecoin had been showing some decent upside promise 3 January, enjoying a consecutive daily run north of five sessions. It rallied up to the 8 January, having gained some 25% within the noted period. The run was the most consecutive seen since May 2019, due to how long the bears have been in control of market direction. The trend has largely been directed to the south since late June 2019, rallies have been subject to being sold. However, LTC/USD technically has recently made a significant breakout.
Weekly Chart View
Price action has managed to stabilize over the last three weeks, running consecutively with green closures. It comes following six straight weeks of selling, LTC/USD had been closing in the red. A run which was triggered by a bearish flag structure breakout; Litecoin was trading within this from 30 September up to 11 November.
The stabilization formed after hitting weekly support down at $36, which was the lowest price seen since February 2019. Litecoin effectively underwent a large correction, following the strong bull run that had commenced at the start of 2019. Market bulls, however, ran into a substantial supply late in June, to then form an evening star candlestick. The formation was a signal of a change of trend to come, and so did it very much prove to be.
LTC/USD is now running at three consecutive weeks in the green, showing decent promise of a further recovery to come for the price. The bulls are set to face a critical weekly barrier, which can be observed at $49.80. It was a prior acting support level before the bears forced their way below in min-November.
Daily Chart View
Technically, LTC/USD was set up for further doom and gloom, given the structure of another bearish flag. The price had been moving within this from 18 December up to 9 January; it was subject to another potential vicious move south. However, a surge of momentum to the upside came into play in the session of 10 January. Litecoin jumped an incredible 14%, smashing out from the flag formation, resulting in an important daily closure above.
Given the above-described technical development from the bulls, a buy position now appears to be attractive. An entry around the current market price, while the price sits just above the breached bearish flag formation. LTC/USD is subject to a small retest of this, as long as it holds, that would mark an additional confirmation for the move higher to come. Another confirmation would be a break of the noted resistance at $49.80. Targets eyed at; $60 and then $75. Stops to be placed at $44.50.
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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