Litecoin has seen a small 0.31% price increase over the past 24 hours of trading. The crypto currency is currently trading at a price of $51.63 after suffering a 14.17% price decline over the past trading week.
News has been relatively light for Litecoin over the past few weeks. The market drop is mainly attributed to the overall market decline which has seen Bitcoin leading the way for altcoins to drop to over 90% price decreases from their all time highs over the course of the trading year.
The crypto currency was developed by Charlie Lee on October 2011 making it one of the oldest cryptocurrency behind Bitcoin. It was designed to be a lighter version of Bitcoin which is where the name originates. Litecoin can boast significant technical advantages relative to Bitcoin such as Segregated Witness, Atomic Swaps and an activated Lightening Network.The Litecoin network has also been described to be much more scalable than Bitcoin in the amount of transactions able to be processed per second.
Litecoin is currently ranked in 7th position in terms of overall market cap across the entire industry. It has a total market cap value of $3.01 billion after the cryptocurrency sees a 47% price decline over the past 90 trading days. The 64 month old currency is currently trading at a price that is 85% lower than its all time high.
Let us continue to analyse price action over the long term.
LTC/USD – LONG TERM – DAILY CHART
Analysing the market from the long term perspective above, we can see that Litecoin had experienced a significant bullish run toward the end of 2017 when price action started from a low of $49 on the 2nd of November 2017 and extended to an all time high price of $370 on the 19th of December 2017. This was an epic price increase of over 700% from low to high.
We can see that price action declined significantly after the market rolled over from it’s all time high. It had originally found some significant support at the .786 Fibonacci Retracement level priced at $118.37 during February 2018. This Fibonacci Retracement level is measured from the entire bullish run outlined above.
This level of support held tonight out the year until July 2017 when price action dropped further lower. We can see that the market fell below the .886 Fibonacci Retracement priced at $86 to fund support at a downside 1.272 FIbonacci Extension level priced at $73.85 during July 2018. This is where the market was trading at since our last analysis.
We can see that price action continued to decline during the bloodbath throughout August and the market fell below the support at $73.85 to find further support below as expected at the downside 1.414 Fibonacci Extension level priced at $53.69. We can see that the market fell slightly lower to complete a 100% Fibonacci Retracement as it touched the $49 starting handle of the 2017 year end bullish run.
One important piece of analysis to highlight is the long term steep descending wedge pattern that has been forming, bound between the two descending dotted lines. This wedge pattern is very close to completion as traders and speculators hope that it will break towards the upside. However, we do not tend place too much dependence on this pattern due to the steep sided nature of the wedge.
Let us continue to analyse price action over the short term period to highlight any potential support and resistance areas.
LTC/USD – SHORT TERM – DAILY CHART
Analysing the market from the short term perspective above we can see that the support at the $49 initial bull run handle was further bolstered by a shorter termed downside 1.414 Fibonacci Extension level (drawn in turquoise) priced in the exact same area. We can see that as the market approached this area of reinforced support it was rejected aggressively as price action rebounded.
If the bearish price action continues within the market, we expect immediate support to be located at the $49 handle. If the market can break AND close below the $49 handle then we expect immediate support lower to be located at the lower boundary of the steep descending wedge formation described above. Further support below can also be expected at the psychological round number handles of $45 and then $40. The last area of support we would like to highlight is the downside 1.618 Fibonacci Extension level (drawn in turquoise) priced at $37.51.
Alternatively, if the bulls can regather momentum at this support level and push price action higher we expect immediate resistance to come in at the previous 1.414 Fibonacci EXtension level (drawn in red) priced at $53.69. Further resistance above this level can then be expected at the 1.272 Fibonacci Extension level (drawn in turquoise) priced at $57.35 followed by the upper boundary of the descending wedge formation. If the market can break up above the descending wedge then it will be free to tackle the $70 handle followed by the 100 day moving average which is currently hovering around the $78 handle.
The technical indicators within the market are largely favouring the bears at this current moment in time. The RSI has recently swing far below the 50 handle indicating that the bears are predominantly in control within the market. If we would like to see some regains to be made for Litecoin then we would need to see the RSI break back above the 50 handle.