Disclaimer: The findings of the following article attempt to analyze the emerging patterns in Litecoin’s long-term market and its impact on the price
Litecoin’s market has been peaking lately, like most of the altcoin market. In fact, the price of the digital asset rose close to the resistance at $85.10, with the same also re-visiting the price levels last seen in February 2020.
With the cryptocurrency’s price testing the resistance at the current level, a short position could be beneficial for the market’s traders.
Litecoin daily chart
Source: LTC/USD on TradingView
Litecoin’s daily charts attached herein noted that the price has been appreciating since October. It met with resistance around the $62.35-level, before pushing through it in November. While the cryptocurrency’s price was strongly positioned at press time, the likelihood of a fall on the charts seemed significant.
Reasoning
The price level has not been tested in recent times and it may have to wait before breaching this level. Additionally, the Relative Strength Index noted that the coin had reached the overbought zone and it may witness a fall to equalize the buying pressure in the market.
On the contrary, the Awesome Oscillator registered robust and rising market momentum, with the same pointing to a bullish market trend, at press time.
Position
Resistance: $85.10
Support: $62.35, $42.42
Entry for Short Position: $82
Take Profit: $62.19
Stop Loss: $88.37
Risk/Reward Ratio: 3.11
Conclusion
Litecoin’s press time charts seemed to highlight a good level for entering a short position, with the crypto’s price primed for the same too. The chances of a correction in the Litecoin market appeared high, with the indicators climbing to the overbought zone and the need to stabilize the market emerging.