Disclaimer: The findings of the following article are the sole opinions of the writer and should not be taken as investment advice
The cryptocurrency market is once again rising to the tune of Bitcoin’s movement. As the world’s largest cryptocurrency climbed to $25k, albeit briefly, the rest of the market rallied too. Although not at a peak, Litecoin’s price, at the time of writing, matched its trading levels in the month of July. At the time, LTC was trading at $129.23 with a market capitalization of $8.58 billion.
The aforementioned sudden surge in LTC’s price could result in a correction and that would be an opportunity for traders to short and book some profit.
Litecoin one-day chart
Source: LTC/USD on TradingView
Litecoin’s daily price chart noted the rising value of the digital asset. The value of the digital asset has been appreciating for almost two months now, with its own set of minimal falls. Following the sudden surge in Litecoin’s price, the same will soon see a correction, a development that would provide an opportunity for the traders to short the coin.
Reasoning
A correction seemed imminent, at press time, as the coin was tapping the overbought zone and looking at its previous tops, there could be a fall approaching the Litecoin market. While the next level of strong support is visible at $84.37, the coin may not necessarily drop to this level. Instead, it may stay close to $100 due to minimal support at this point.
Further, the Awesome Oscillator was also noting strong buy momentum in the market. This was a sign of a bullish market, however, and as the momentum reduces, the chances of a reversal become all the more evident.
Positions
Entry: $128.50
Stop-Loss: $132.0
Take-Profit: $ 107.74
Risk-to-Reward: 5.93
Conclusion
Litecoin’s market has been following a bullish trend lately, but sharp selling pressure could be seen in the market. With the indicators underlining a top for the buying pressure, this might be a sign of a reversal and traders can take profit in the long term at $107.