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Litecoin jumped 12% over the weekend to surge to a 4-month high of $2.100 as bulls decide to take full control of the situation. In my previous analysis, I had discussed that the market may end its consolidation soon and now that it has, I expect the action to continue for a little longer.
As bulls take a breather, Litecoin is trading at $2.013.
Image: https://www.tradingview.com/x/hih5NAdg/
The massive rally in Litecoin must have taken a majority of market participants by surprise. But now, as the price looks to form a base above $2.000, minor profit booking cannot be ruled out.
Litecoin Chart Structure – The 240-minute LTC/USD price chart above indicates that the cryptocurrency has re-entered its upward trading channel as demand for Litecoin soared. The cryptocurrency staged a breakout above the support level and retested it before making a strong upmove on high volume. As the price approached the upward range of the channel, traders booked profits which dragged the price.
Moving Average Convergence Divergence – The strength of the momentum is also displayed by the MACD and the Signal Line readings. The latest MACD value is 0.0594 while that of Signal Line is 0.0443.
Momentum – The Momentum value is at its highest level of June i.e. at 0.1522.
Relative Strength Index – Following the massive rise, Litecoin became highly overbought with an RSI value of 87.1229. Even as the price consolidates now, the RSI projects overbought condition with a reading of 74.5601.
Conclusion
The rally in Litecoin has been confirmed by the technical indicators and the volume activity, and therefore, traders and speculators should increase their long positions on declines down to $1.940 by placing a stop-loss just south of $1.900. Since the price is at exorbitant levels, bouts of profit-booking and high volatility may be in the offing. Trade by keeping in mind the personal risk-appetite.
