Bullish bias is still evident in Litecoin even as the cryptocurrency fell sharply from 2.14 to 1.98. As discussed in yesterday’s analysis, the recent correction in Litecoin presents to us an incredible opportunity to buy as the price structure strongly favors the bulls. Each Litecoin is currently trading at $2.05.
A precise technical analysis on the 240-minute LTC/USD price chart indicates that the digital currency may have bottomed out and head higher to take out the 2015-peak eventually.
Technically, Litecoin seems to be enjoying a positive undertone. Price chart and technical indicators also seem to be favoring the upmove which began in early March.
- Momentum – The momentum reading has staged a U-shaped recovery and turned fairly positive to 0.0540. A positive momentum reading is an indication of favorable future trading sessions for the cryptocurrency.
- Relative Strength Index – Litecoin has regained its strength sharply post the massive drop, which indicates that smart money may have bought into the grossly undervalued currency. The RSI is also following a higher-top, higher-bottom structure and should lend confidence to the fresh buyers.
- Textbook Bullish Price Structure – In what can be said as a major positive for the altcoin is the buy-on-dips strategy which has been consistently employed by investors and traders alike. The market has been treating earlier resistance levels as strong supports, as can be seen from the chart above. The two strong horizontal levels, HS1 and HS2, have been marked in the chart. Meanwhile, the bulls have also established a strong support at $1.90, in the form of upward sloping trendline.
These are fairly strong technical positives for the cryptocurrency and market participants should be looking at entering into Litecoin at current levels. Small sums can be used initially to avoid negative price shocks and subsequent losses. However, long positions must be added until $1.90 is pierced on the downside.