Litecoin Stages Comeback Following Brutal Selloff: Is Now the Time for Bottom-Fishing in LTC?
Volatility is the name of the crypto game. Litecoin (LTC), a prominent digital asset, has been no exception to this rule. The market has recently undergone its most severe correction since the bear market that bottomed out in June 2022.
While many investors are on edge, this could actually be a silver lining for those looking for an opportune entry point.
What you'll learn 👉
A Retrospective Look at Litecoin’s Performance
Let’s take a step back and assess Litecoin on a weekly timeframe. The asset hit rock bottom in June 2022, only to surge in a robust bullish wave that peaked in July 2023. This upward trajectory lasted for over a year, capturing the attention of both seasoned traders and newcomers alike.
However, what goes up must come down. Litecoin experienced its most significant correction in over a year, with a seven-week-long downward spiral. The last week of this correction was particularly brutal, painting the charts a vivid shade of red.
Following this tumultuous period, the market showed a Doji candlestick pattern, which is often considered a sign of market indecision. Interestingly, this Doji closed green, and the subsequent week also showed a green candlestick.
The correction halted just shy of the 0.786 Fibonacci retracement level, calculated relative to the entire bullish wave from June 2022 to the present. This could indicate that the asset is gearing up for a rebound.
After breaking out bearishly from a Channel Down pattern, Litecoin’s price plummeted to a support zone around $65. The Relative Strength Index (RSI) is hovering around 25, signaling that the asset is significantly oversold. This sets the stage for a potential near-term bounce. However, it’s crucial to note that this is a high-risk trade setup, given that the overall trend is bearish. Setting a price alert is advisable.
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The market is currently in a downtrend across all time horizons—short, medium, and long-term. The Moving Average Convergence Divergence (MACD) line is above the MACD Signal Line, indicating bullish momentum. However, the RSI is below 45, which suggests bearish momentum, making the overall momentum mixed.
Investors should keep an eye on the nearest support zones at $65 and $50. On the flip side, resistance zones are situated at $75 (which was a previous support level) and $90.
Final Thoughts
While the market conditions for Litecoin appear precarious, they also offer a potentially lucrative entry point for risk-tolerant investors. As always, due diligence and risk management are key in navigating the volatile landscape of cryptocurrency trading.
You can view our Litecoin price prediction here.
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