The Litecoin (LTC) price is in the process of validating a resistance line from which it broke out. The trend can be considered bullish if the price does not close below $79.
The Litecoin price had increased inside an ascending parallel channel since the beginning of May 2022. While such channels usually contain corrective movements, the LTC price managed to break out on Jan. 11, 2023. This is typically a sign that the upward movement is impulsive.
Moreover, the daily RSI broke out from its bearish divergence trend line and is now moving upward.
Currently, the Litecoin price is in the process of validating the channel’s resistance line as support (green icon). If it is successful, the next resistance would be at $130. On the other hand, a decrease below the channel’s resistance line would indicate that the breakout was not legitimate and new lows will follow.
Litecoin Price Could Re-Test $79 Support
The six-hour chart shows that the LTC price has followed an ascending support line since Nov. 9. It validated the line on Dec. 29 (green icon) and accelerated its rate of increase afterward. Moreover, it shows that Litecoin broke out from the $79 resistance area.
Despite the increase, the six-hour RSI shows signs of weakness in the form of bearish divergence (green line). As a result, it may return to re-test the $79 area as support. The area will soon coincide with the ascending support line.
Due to this confluence, the Litecoin price trend remains bullish as long as it does not close below the $79 confluence of support levels.
LTC/BTC Creates Bearish Pattern
While the LTC/USD pair looks bullish, the same cannot be said about LTC/BTC. The price has created a double top, which is considered a bearish pattern. Moreover, the pattern has been combined with bearish divergence in the RSI (green line).
As a result, a downward movement toward the ₿0.0038 or ₿0.0034 support levels is the most likely scenario.
Increasing above the second top high of ₿0.0047 would invalidate this bearish price projection.
To conclude, the LTC/USD price trend is bullish as long as the price does not close below $79. On the other hand, the LTC/BTC price is expected to retrace due to the creation of a bearish pattern.
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