Is Litecoin Expecting A Pullback Before Soaring Again?

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The Litecoin price has shown bullish sentiment over the past week once it bounced off the $81 resistance zone. Over the last 24 hours, the altcoin jumped by 2%, and in the past week, the LTC price gained close to 6%.

As Bitcoin continues to trot upwards and is now eyeing the $23,000 price mark, other altcoins have reflected the same price sentiments. The technical outlook of the Litecoin price has depicted that accumulation shot past the overbought region just when Litecoin breached the $81 price region.

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Demand for the coin remained steady between the $81 and $88 price levels, respectively. As Litecoin traveled above the $88 price zone, the coin started to display a price correction. Going by the indicators, Litecoin continues to remain heavily bullish on its chart, with another chance of a price retracement.

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Bullish momentum has gained strength since it moved past the $86 price mark, which is why a move to the $90 mark was swift and easy for Litecoin. Historically, the $93 resistance mark has acted as a pullback region for the coin. LTC might reach the $93 level over the next trading session if Bitcoin continues to surge.

Litecoin Price Analysis: One-Day Chart

Litecoin was priced at $91 on the one-day chart | Source: LTCUSD on TradingView

LTC was trading at $91 at the time of this writing. Over the past couple of weeks, Litecoin has pierced through several resistance levels. The coin faced stiff resistance at $81 and has been rallying since crossing that level.

Overhead resistance for the coin stood at $93; this will act as a crucial price mark because LTC can experience a pullback before it tries to breach the $106 resistance mark.

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On the other hand, if Litecoin fails to remain above the $88 support line, it would lead to sellers exceeding buyers, causing the altcoin to fall to $80 and then $71. The amount of LTC traded in the last session was red, which signified that there was a fall in the number of buyers.

Technical Analysis

Litecoin was still overbought on the one-day chart | Source: LTCUSD on TradingView

LTC hovered around the overvalued zone, which indicated that there would be another price correction before it started to trade upwards again. The Relative Strength Index (RSI) stood at the 70 mark, which indicated that the asset was overbought.

A fall from the overvalued zone can drag the price of the asset below $88. Litecoin continued to depict extreme bullishness as the price was above the 20-Simple Moving Average line.

This meant that buyers were driving the price momentum in the market. The coin was also above the 50-SMA and 200-SMA lines. However, the 50-SMA was above the 20-SMA, which is a sign of impending bearishness and indicates a price pullback.

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Litecoin indicating upcoming price volatility on the one-day chart | Source: LTCUSD on TradingView

Buy signals for the asset started to show a decline, which meant that buyers might start to exit the market over the next few trading sessions.

The Moving Average Convergence Divergence (MACD) indicates price momentum and reversal; it displayed receding green signal bars, which meant incoming bearish price action.

Bollinger Bands indicate price fluctuation and volatility; the bands were far apart, which implied forthcoming price instability.

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Author: anushsamal

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