Litecoin (LTC) price has gained in the last five days. Despite this increase, it is uncertain whether the reversal has started or LTC is in a relief rally.
Since hitting a May 2021 high of $413.49, Litecoin (LTC) price has declined below a descending resistance line. The line rejected the price in February (red icon), starting the current downtrend.
Last week, LTC price rebounded above the $68 support area (green icon), validated it, and formed a long lower wick (green icon). This is considered a sign of buying pressure. Besides, the weekly RSI has bounced above 50, another bullish sign.
If the price breaks down, the main resistance area will be at $105. This is the last resistance before $270. Therefore, if the price of LTC breaks above it, it could accelerate the rate of growth significantly.
However, if the resistance line rejects the price, another test of the $68 support area would be in the cards.
Litecoin (LTC) Price Movement – Relief Rally or Reversal?
Technical analysis from the daily time frame offers a mixed outlook. Litecoin price broke a rising wedge and may be in the process of validating it as a resistance (red icon).
Furthermore, the daily RSI has dropped below 50, which is a bearish signal. LTC price seems to have completed a five-wave upward movement, which has taken the shape of a major diagonal.
Later, the digital asset bounced back against the 0.618 Fibonacci retracement support level (green icon). It is uncertain whether the bounce is just a relief rally or if the correction is already complete.
If the correction completes, LTC price will be expected to break above the resistance line and the $115 area. Then, it could rise to $275. However, if this turns out to be only the first part of a correction, the price could decline further towards the $52 support area. The next 24 hours could be crucial in determining which approach is the correct one.
To conclude, whether the price of LTC retests the support line of the previous wedge could determine the future trend. If this happens, the price could break above a long-term descending resistance line. If there is a rejection, there could be a decline towards $52.
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