- Litecoin pressing round figure
- Testing the 50-day EMA
- Recently broke trend line
Litecoin has been a bit of a laggard when it comes to the crypto markets lately, but it does look as if it is going to try to test a major resistance barrier in the next few days. The previous support level of $80 is now in focus, an area that had caused a bit of noise during most of the summer. With the surge higher that took place on Tuesday, the market did slow down as it approached this crucial level.
That being said, the market recently broke above a trend line. The trend line, of course, is one of the first signs that perhaps the overall trend is being changed. Obviously there is a lot to go to the upside in order to completely overwhelm the sellers, but it certainly appears that the next few days should give the market some answers.
Crucial confluence
Litecoin daily chart
With central banks around the world cutting interest rates, it makes sense that digital currency should pick up a bit of value. Bitcoin has been somewhat flat lately, while the Litecoin market has fallen. This shows some divergence when it comes to the usual correlations, but as crypto markets mature, we will probably see more of it. However, there is a certain laissez-faire attitude that is found in all correlated assets, so at this point Litecoin needs to join the fray.
With the 50-day EMA and the round figure of $80 meeting at the same time, not to mention the fact that the price of Litecoin offered previous support, the next couple of days could be crucial. This lines up quite nicely with the Federal Reserve interest rate decision, and if the US dollar gets hit hard, there is the possibility that it will have a bit of a knock-on effect over here as well.
The trade going forward
The trade going forward is relatively simple. A daily close above the 50-day EMA and the $80 level would signify more volume coming into the market for a push higher. At that point, it’s likely that the market will go looking towards the next major resistance barrier, which is the psychologically important $100 level. This had been resistive during the months of July and August. Obviously, that would attract a lot of attention and possibly get even more money into the marketplace, but in the meantime it makes a nice target for the bullish traders out there.
The alternate scenario is that the market fails at this level. If it does drop below the $70 level, it’s very likely that $60 would come back into focus as a level of previous support. This is also where the buyers had started to try to push this market back to the upside. In summary, the daily close will be crucial over the next couple of days, and it’s certainly worth paying attention to.
