Technical Analysis and Market Entry: LTC/USD Must Hold Critical Support For Another Big Run Higher
- Litecoin price has been running to the north for seven weeks, gaining some 100%.
- There is a small risk via the daily chart view for LTC/USD of an evening star, the price most not close below $76.67.
LTC/USD: Recent Price Behaviour
Litecoin is on a solid run to the north; the price has pushed higher for going on seven weeks. Bulls are enjoying the most consecutive run seen since April-May, before losing momentum in June 2019. The price has gained a whopping 100% within the noted period, rallying from $39 up to recent highs above $78.
At the time of writing, the price is challenging a strong area of supply which can be observed from $77-83 price range. Litecoin has not comfortably traded above this area since August 2019. At the time LTC/USD was moving within a bearish trend, which led to the bottom late in 2019 at $36. However, if the bulls can break down the noted area of supply, there should be another strong wave of upside momentum that follows.
Weekly Chart View
LTC/USD has been rallying to the upside for more or less seven consecutive weeks, similar characteristics to the early 2019 bull run. The bulls smashed out of a bearish market structure, in which the price was producing lower highs and lower lows.
Given the breaking free of this view, it invited further buying interest in Litecoin. The last extreme high that was observed as part of that noted structure was seen at $66 in November. Market bulls initially had some trouble breaking this down in the week 13 January, LTC/USD saw a minor retreat in the following week.
In the closure of last week, Litecoin has managed to close above a critical weekly resistance level at $73.00. The price has previously demonstrated difficulty in breaking this down, most recently in the week of 27 January.
Daily Chart View
The daily candlestick for the session of 9 February, produced somewhat of an evening star formation. Typically, these are the indication that a change in trend is incoming; however, a confirmation would be closure below in the following daily candlestick. The price closed at $76.67, depending on how this closes, could dictate the next trend over the coming days. Critical daily support, however, should be noted at $73.00. Failure to hold would likely invite a fresh wave of selling pressure.
There is some cooling in the price at the time of writing; as noted above, there is supply running from $77-83. Further, buy positions would be attractive upon a retest and hold of critical daily support at $73.00. Upside targets from here would be eyed at; $95, $100 and then $110. Stops upon entry as described would be placed at $70.
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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