- Litecoin (LTC) showcases a bullish double-bottom pattern.
- A breakout from its descending resistance might see Litecoin aiming for the $85 mark.
n recent developments, Litecoin (LTC) demonstrates bullish tendencies, having seen a positive shift in its price since August 17. Anchoring these movements, a double-bottom pattern emerges, emphasizing Litecoin (LTC) Bullish Potential.
Litecoin’s Price Points to Bullish Indicators
When observing the daily technical analysis, LTC’s price trajectory indicates it’s been navigating under a descending resistance line from its annual high of $115 on July 3. This journey took it to a dip of $56 by August 17, but it quickly regained momentum, leaving behind a long lower wick.
Returning to its previous low on September 11, the cryptocurrency revealed a double-bottom pattern, an often bullish sign hinting at potential breakouts. This pattern got further validation through a bullish divergence in the Relative Strength Index (RSI).
Understanding the RSI is crucial. As a momentum pointer, it aids traders in determining market conditions—whether it’s tilted in favor of buyers or sellers. A reading above 50 coupled with an upward trend typically favors the bulls.
Divergence: An Optimistic Sign
A bullish divergence—where price drops juxtapose with momentum surges—usually predicts substantial price hikes. For LTC, should it manage a breakout from its descending resistance line, we might see a surge of 37%, potentially touching the $85 resistance. This resistance is carved out by the 0.5 Fibonacci retracement level.
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However, the flip side posits that any failure in achieving a breakout might trigger a 20% decline, plummeting the value to a $50 support zone. By following its current resistance trajectory, this decline could materialize by early October.
Short-Term Analysis Bolsters LTC’s Bullish Outlook
Switching to a six-hour timeframe, the technical analysis continues to echo the bullish sentiment of the daily chart. The six-hour RSI further substantiates the double-bottom pattern, pointing towards an inception of a long-term rise, especially with indicators surpassing the 50 mark.
Adding more weight to this bullish narrative, LTC seems to have broken free from a short-term descending resistance line. This could potentially set off a breakout from the overarching long-term descending resistance line, driving the price beyond the coveted $85 mark.
However, if Litecoin fails to penetrate the long-term resistance, we might witness a sharp 20% downturn, with LTC seeking solace at the $50 support.
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