Litecoin (LTC) appears ripe for a rally after a sharp drop that started on June 4. LTC, just like all other major cryptos, has been sealed in a bearish trend, but appeared to survive the recent brunt by the US Securities and Exchange Commission (SEC) on crypto prices. Note that Litecoin features among the proof-or-work tokens that were missing from the financial regulator’s “securities” list.
Litecoin Price Readies For A Recovery
LTC is down 14% over the last 30 days and trades 20% below the June 1 opening. Nevertheless, the Bitcoin fork is up 79% over the last one year and 11% year-to-date. Generally, this is an indication of bullishness, reinforced by the fact that LTC’s market cap has been increasing, reaching $6 billion, according to data from CoinMarketCap.
The LTC/USD daily chart below shows that the price touched the upper boundary of the demand zone on June 10, pointing to a possible trend reversal. This outlook was reinforced by the small changes already being witnessed and the balancing of the Relative Strength Index (RSI) above the oversold region. The price strength at 33 indicates LTC is close to oversold, and a pullback might be underway prospectively as traders buy the dip.
Typically, demand zone is a price area with strong buying interest below the current price action. Many investors don’t want to buy the asset until it goes lower and reaches the demand zone because a person may get greater returns on the portfolio.
Increasing demand from the buyer congestion zone stretching from $66 to $77 could see Litecoin climb to flip the 200, 50- and eventually the 100-day Simple Moving Averages (SMAs) at $85, $87.3 and $87.9, respectively into support.
If this happens, LTC price may ascend higher to tag the $101 resistance level, clearing an the way for an extended rally toward the $105 range high. Such a move would constitute a 37% uptick from the current price.
LTC/USD Daily Chart
Conversely, Litecoin price may move in favor of the bears tumbling past the demand zone, invalidating it and making it a breaker block. The move could see LTC drop to the psychological $60.0 level or in highly bearish cases, tag $50.0.
Both the RSI and the Moving Average Convergence Divergence (MACD) indicator were facing down. The osition of the MACD at -3 in the negative region suggested that market conditions still favored the downside.
Traders could expect bulls to aggressively defend the $50, a place where they could regroup, get in on the dip before staging another recovery.
