Litecoin Price Tests Critical Support: Will the Bulls Prevail?
NOIDA (CoinChapter.com)— Litecoin price ended June down by nearly 10%, and so far, July has not been very kind to the blockchain platform. LTC bulls have failed to convert a recent surge in network activity into a bullish cue for the token.
However, a technical setup might help avoid LTC price more bloodshed, if the bulls manage to avoid invalidating the pattern.
Litecoin Price Testing Support Of Bullish Setup
The Litecoin token’s price has formed a bullish technical setup called the ‘ascending triangle.‘
The token’s price are currently testing the ascending trendline of the pattern. A rebound from here could infuse confidence in the token’s rally, attracting more buyers expecting a bullish breakout.
Under technical analysis, an ascending triangle pattern emerges when a horizontal trendline connects swing highs and an ascending trendline connects swing lows. The pattern indicates a consolidation period where the buyers gradually gain strength against a consistent level of resistance.
Volume analysis is critical, as it helps to validate the breakout’s strength. Typically, as the price action approaches the triangle’s apex, the volume tends to decrease, reflecting a period of reduced trading activity and uncertainty.
When the trendlines converge, creating a narrowing price range, buyers often enter the market in anticipation of a breakout. Ideally, the breakout occurs above the horizontal resistance line, accompanied by a significant increase in trading volume.
The surge in volume is a key indicator that the breakout is robust and likely to sustain.
According to the rules of technical analysis, the price target for a breakout is equal to the triangle’s height at its thickest point. If the bullish pattern pans out, the theoretical price target for LINK is near $269.5, a spike of 267% from current levels.
LTC price Fails To Conquer EMA Resistance
Litecoin price has failed to move above the 20-day EMA (red wave) dynamic resistance since June 8, with prices dropping nearly 6% to a daily low near $72 on July 3. The downtrend suggests bears are booking profits near $72.
A sustained rally from here would likely see Litecoin price rally to the 50-day EMA (purple) resistance near $78. Moreover, flipping the above immediate resistance level could help LTC price rise to the resistance near $85.
On the other hand, if prices continue to fall, Litecoin could end up invalidating the pattern, inviting more bearish sentiment and likely ending up at the support level near $69. Failure of the immediate support could force LTC price to test the support near $63.8 before recovering.
The RSI for LTC remained neutral, with a score of 41.86 on the daily charts.
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