Why Litecoin (LTC) Could Witness A 24% Drop, and Can It Be avoided?

A rising wedge pattern governs the ongoing recovery in the LTC/USDT pair. Following this pattern, altcoin surged 63% and formed a local top at the $64.5 mark. However, the very nature of this pattern is to resume the prevailing downtrend once the price breaches its rising support trendline.

Key points from LTC analysis: 

• The LTC price nearing the apex of the wedge pattern may soon lead to a breakout action
• The 20-and-50-day EMA flipped into a viable support 
• The intraday trading volume in the Litecoin coin is $537.6 Million, indicating a 21.6% gain.

Source- Tradingview

On August 15th, the LTC price turned down from the combined resistance of resistance trendline and 100-day EMA to trigger another bear cycle.

The bearish reversal from this pattern plunged the LTC price by 8.57%, where it retested the pattern’s support trendline. Furthermore, the ascending trendline aligned with the 20-day EMA reverted the price higher to maintain this recovery.

Earlier today, the LTC price witnessed a 5% jump, but the supply pressure at $64.5 undermined the buyers’ attempt with complete rejection. If the selling pressure persists, the altcoin may pierce the support trendline to trigger the wedge pattern.

Losing this dynamic support, the LTC price would witness a significant correction that may plummet the coin by 24% and hit $46.6 support.

On the other hand, a less likely yet possible breakout from the overhead trendline may free the altcoin from this bearish thesis. Moreover, a bullish breakout from this resistance may push the prices to $74.5.

For coin holders: As per the technical analysis, the LTC buyers can maintain a bullish sentiment until the price trades above the support trendline.

Technical indicator

Relative Strength index: The daily-RSI slope walking a lateral path above the trendline indicates the market participant feels positive for Litecoin.

MACD indicator: The fast and slow lines showing multiple crossovers accentuate uncertainty among market participants. However, these lines are moving above the neutral line, indicating buyers are still in control.

• Resistance Levels: $64.5 and $74.4
• Support Levels: $59 and $53.8