Litecoin Facing Major Resistance
- Testing psychologically significant $45 level
- Forming shooting star
- Market approaching 50 day EMA
- Bitcoin good indicator for other cryptocurrencies
Litecoin continues to see pressure from above, but that should be no major surprise considering that in general cryptocurrencies have been struggling. As Litecoin is one of the secondary coins, it will follow the rest of the cryptocurrency market in general. It has been falling for some time, and although the last couple of weeks have seen a small bounce, volume will still continue to be a major issue as we are heading towards the New Year’s holiday.
The technical analysis for Litecoin is negative, based upon a multitude of indicators. Initially, the first thing that the market will need to come up against will be the $45 level. This level, in and of itself, is psychologically important. At this point, the market has tried to spike towards that area, but then broke down significantly from there. That being said, the 50 day EMA is going to approach the market rather quickly, as it is currently at the $46.46 level.
The 50 day EMA will attract a lot of attention, and as a side note it seems as if cryptocurrency markets do pay special attention to the 50 day EMA from Bitcoin to Ripple, and of course Litecoin. As the market approached the $45 level, there was a significant surge of volume to the downside as longer-term trend traders continue to push to the downside. That being said, it should also be noted that the market did bounce rather significantly from the $37.50 level, which makes for a nice target. Furthermore, the $40 level underneath is an area where we have seen some support, albeit in low-volume.
With that in mind, the target is probably $40 initially, followed by the previously mentioned $37.50 level. However, if the market was to turn around a break above the 50 day EMA that would of course be bullish.
Ultimately, Bitcoin is one of the most important charts to pay attention to if you are trading crypto in general. Ultimately, Bitcoin looks very skittish and weak at the moment, so that continues to put negativity throughout the sector into play.
Litecoin is struggling with $45
The main take away is that the market is going to struggle with $45 as far as Litecoin is concerned, and needs help from the outside, most notably in the form of a Bitcoin rally. Litecoin, of course, is second-tier when it comes to crypto, so unless a specific headline comes out influencing Litecoin itself, it will drift lower right along with it.
With that, selling rallies should continue to work, and therefore looking for signs of weakness should be the best way going forward. After all, if the most widely accepted crypto coin is struggling, many of the others will right along with it.