Litecoin [LTC] bears doubled down on their consistent efforts to close below the $98-mark for nearly 17 months. After the market-wide liquidations, the close below this mark pulled LTC into a relatively low liquidity zone.
Thus, it took a swift plunge below some crucial price points while chalking out a bearish pennant on the daily chart.
A potential close above the basis line (green) of Bollinger Bands (BB) could affirm the chances of a 38.2% retest in the coming times. At press time, LTC traded at $65.755, up by 5.6% in the last 24 hours.
LTC Daily Chart
The altcoin took a bearish tilt after a strong pullback from the $106-level on 5 May. Moreover, LTC hasn’t been able to advance above the basis line of BB for nearly two months now.
After the buyers failed to protect the $91-$98 range, LTC saw an over 51% loss to its 18-month low on 12 May. During this fall, the 38.2% Fibonacci resistance stood quite well to curb all the buying rallies.
With the basis line of BB still looking south, the buying comebacks still needed to register higher trading volumes. Furthermore, the bearish pennant’s breakdown halted near the lower band of BB. With the declining gap between the upper and lower bands, LTC could see a low volatility phase near its POC in the coming sessions.
A convincing close beyond the $67-mark would aid LTC’s recovery toward $72 near the 38.2% Fibonacci level. Post which, the quantum buying volumes would influence the future trajectory.
Rationale
Source: TradingView, LTC/USD
The Relative Strength Index (RSI) has been rebounding from the 40-mark resistance for the last 25 days. A potential rebound from this level would confirm a ‘medium’ bearish divergence with the price.
Investors should look for a close above this mark before placing long bets in the near term.
Further, the Awesome Oscillator (AO) seemed to continue the gradual movement toward the zero-line. Any close above the equilibrium would affirm a bullish twin peak setup.
Conclusion
Placing long bets may not be the best course of action until LTC crosses key levels on the front of its technical indicators.
A close beyond the $67-zone would open up near-term recovery gates toward the 38.2% level. But the alt would likely enter a squeeze phase until the buyers consistently ramp up the buying volumes.
Finally, LTC shares a staggering 98% 30-day correlation with the king coin. A close eye on Bitcoin’s movement would be imperative to make a profitable move.
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