Is Litecoin at a critical juncture?
At this point, we need to look at Litecoin through the lens of the longer-term charts. While Bitcoin has done fairly well recently, it has stalled a bit and that of course has a significant effect throughout the cryptocurrency markets. Litecoin of course won’t be any different than the other one, and it should be pointed out that Litecoin is at an area that could mean a lot for the longer-term attitude of the market.
The technical analysis for Litecoin is very crucial, as we have a lot of different factors showing up in the same place. This is very interesting to me and I think that at this point it’s likely that we could see a lot of different forces coming into work on the value of Litecoin. We have the uptrend line that the market is currently sitting on, which of course has been reliable several times. That being said though, the latest bounce from the uptrend line was very disappointing, as we failed right at the 50 day EMA which is now starting to turn lower.
Having said that, we are sitting at the 200 day EMA which could help the buyers come in and support this market, but quite frankly the candlestick that is forming for the day is suggesting that perhaps it may not help. The uptrend line and the 200 day EMA sitting at the same level of course is something that most certainly should be paid attention to, but a break down below this level could open up quite a bit of selling.
So now that we recognize that we are at major levels in the Litecoin market, we should also pay attention to the $75 level, because if we get down below there it would be a fresh new low, and more importantly it would be a break of the 61.8% Fibonacci retracement level. That could open up a lot of selling pressure to this market, as a major breach of confidence and safety. All things being equal though, I don’t think it’s going to be easy to recover from that, and we would more than likely go looking towards the $50 level. That of course is an area that will attract a lot of attention from a psychological standpoint, but at this point we might be getting ahead of ourselves.
The play going forward
I believe that the play going forward is to simply wait to see where the daily candle stick closes. If we can bounce from here we could make a move towards the 50 day EMA which is closer to the $100 level. Pay attention to Bitcoin, it will lead the way as well. On the other hand, if we are to close below this uptrend line, pay attention to whether or not the market breaks below the $75 level. If it does, then it’s very likely that we break down at least another $25 if not further. It certainly looks as if Litecoin is in trouble.