Litecoin Aims to Break out Above Significant Resistance

Litecoin Price Highlights

• The Litecoin price broke out from a descending channel.
• There is resistance at ₿0.0078.
• There is support at ₿0.0071.
• Technical indicators are bullish.

Trader @CryptoDonAlt posted a bearish Litecoin price chart, in which the current price increase is only a retest of the previous breakdown level. If so, Litecoin will soon reverse and head towards new lows.

$LTC

What if this is a neckline retest of a multi-year head and shoulders? pic.twitter.com/aw6Kjdfson

— DonAlt (@CryptoDonAlt) February 5, 2020

Let’s take a closer look at the Litecoin price movement and determine if this really is the case. BeInCrypto successfully predicted this movement in its previous analysis.

Litecoin Breakout

On January 14, the Litecoin price broke out from a descending channel. Afterward, it returned in order to validate it as resistance on January 24 and has been moving upwards since. The Litecoin price moved above the ₿0.0071 resistance area without experiencing any retracement and is currently inside the ₿0.0078 resistance area. In addition, the LTC price has yet to validate the ₿0.0071 area as support — a relatively common movement after price breakouts. Technical indicators suggest that the current trend is bullish and support a continued price increase:

• First, LTC finally moved above its 200-day moving average (MA) — something that it has not done since June 2019.
• In addition, the 50-day MA has begun to turn upwards — potentially setting itself up for a bullish cross with the longer-term 200-day MA.
• Furthermore, while the daily RSI is overbought, it has not generated any type of bearish divergence. It bounced perfectly on the 50-line, indicating that the price is in an upward trend and will continue to grow.

Long-Term Resistance

The resistance area outlined in the tweet is found between ₿0.0070-₿0.0074. While this is not true in the monthly chart, which is used in the tweet, the weekly chart reveals that the price has already broken out above this resistance area. In addition to the short period of time the price spent below this area and the generally-bullish sentiment in the markets, it seems more likely that the decrease below it was a fake breakdown. However, the Litecoin price has yet to confirm that it has reclaimed this area as support. If it does, the next significant resistance area is found at ₿0.0095.

Future Movement

As for the future movement, there is some short-term weakness in the LTC price that suggests a short-term correction awaits. LTC has created two long upper wicks inside the ₿0.0078 resistance area. In addition, the RSI has been generating bearish divergence. Therefore, a possible future movement would be a consolidation between these two areas before a breakout transpires. To conclude, the Litecoin price has broken out above a long-term resistance line. It has been moving upwards since but has failed to break out above a significant resistance area. We believe it will eventually be successful in doing so after a possible initial short-term decrease.