Litecoin looks unstoppable! The bullish herd mentality has pushed the price to a fresh 10-month high of $6.453 on strong trading volume. And there are no technical signals which indicate that the frenzy is about to lose steam. In fact, the market participants have started accumulating Litecoin on even the slightest dip.
Litecoin has added 18% in gains since yesterday to currently trade at $6.153.
The 240-minute LTC-USD price chart looks sturdy and poised for more gains. But since the cryptocurrency has already rallied significantly in such a short time, I remain skeptical of its future returns.
Litecoin Chart Structure – A look at the above chart confirms that bulls are stomping on the bears at every opportunity. Litecoin took out its previous high of $5.645 on strong volume and continues to trade near the highs.
Moving Average Convergence Divergence – The Histogram value continues to flirt with the 0 level as MACD yet again crosses the Signal Line, this time on the upside. At the time of writing this analysis, MACD has a value of 0.4592, Signal Line has a value of 0.3691 while the Histogram has a value of 0.0901.
Momentum – The Momentum indicator witnessed another wild swing in the reading. From yesterday’s dismal reading of -0.0601, the value jumped drastically to hit 1.3869 before easing down to 0.9115.
Relative Strength Index – The 14-4h RSI value signifies that Litecoin is overbought at current levels. The latest underlying strength reading is 71.4071.
There doesn’t seem to be anything that is deterring the bulls at the moment. The cryptocurrency has posted phenomenal gains in such a short span of time, without any fundamental backing, and that is what is increasing the risks of the trade. Litecoin is a total momentum play and those who wish to ride this momentum-based rally may buy on dips with strict losses in place. I wouldn’t want to ride this rally.