The Litecoin (LTC) price created a double bottom pattern and broke out from a descending resistance line on Sept. 15.
The readings from the daily and six-hour timeframes support the validity of the breakout, hence suggesting that the increase will continue.
Litecoin Price Breaks Out After Bullish Pattern
The daily timeframe technical analysis for LTC provides a bullish outlook. It shows that the price broke out from a 74-day descending resistance line on September 15. Such breakouts often indicate that the previous bearish trend has ended and that the price has begun a new trend in the other direction.
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The movement before the breakout is also bullish. Between August 17 and September 11, the LTC price created a double-bottom pattern, which was combined with a bullish divergence in the RSI (green line).
With the RSI as a momentum indicator, traders can determine whether a market is overbought or oversold and decide whether to accumulate or sell an asset. Bulls have an advantage if the RSI reading is above 50 and the trend is upward, but if the reading is below 50, the opposite is true.
The RSI is increasing and has nearly moved above 50. However, the more important reading is the bullish divergence that aligned with creating a bullish double-bottom pattern. A bullish divergence occurs when a price decrease is combined with a momentum increase. It often precedes significant upward movements.
If the cryptocurrency continues to move upwards, it can increase by 25% and reach the $78-$85 resistance area. However, if the rally loses steam, a 12% drop to the $55 support area will likely be the future outlook.
LTC Price Prediction: Is Short-Term Breakout a Sign of Things to Come?
The short-term six-hour analysis also provides bullish signs. The chart shows that the LTC price broke out from a shorter-term descending resistance line, beginning the current upward movement.
Moreover, the breakout caused a reclaim of the $62.50 horizontal area, which is expected to provide support.
Finally, the RSI has increased above 50 and is currently validating the line as support (green icon).
Therefore, the most likely LTC price prediction is bullish and suggests that a 25% increase is expected. However, a close below the $62.50 horizontal support area will mean that the breakout was not legitimate, and a drop to $55 is expected.
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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.