Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Litecoin’s price has seen a bit of volatility over the past two months. However, its price has been fairly rangebound too, with the altcoin failing on multiple occasions to go past the $240-price range. This was the case over the past week as well, with the cryptocurrency relying on its immediate level of support to stabilize its price.
At the time of writing, LTC was trading at $203.5 with a market capitalization of $13.6 billion. While the coin registered a marginal 3 percent gain over the last 7 days, its 24-hour price action seemed to suggest that a trend reversal may be soon incoming.
Litecoin 1-day chart
Source: LTC/USD, TradingView
Over the course of the past two months, LTC has traded between its resistance at $243 and its second level of support at $153. The coin failed to breach this resistance earlier in the week and has seen history repeat itself, relegating LTC’s price to the $200-range.
The coin, at press time, was being held by the support at $193, and given the build-up of bearish momentum, it may even head towards the second support at $159.
This would give traders with short positions a good opportunity to take advantage of.
Rationale
Litecoin’s technical indicators painted a bearish picture for the coming week. The RSI indicator was in the neutral zone, despite it dipping slightly towards the oversold zone.
The MACD indicator was also on the verge of a bearish crossover and if the Signal line goes well past the MACD line, then traders can expect a further dip in LTC’s price.
Important levels to watch out for
Resistance: $243
Support: $193, $157
Entry: $192
Take Profit: $161
Stop Loss: $240
Risk/Reward: 0.65
Conclusion
LTC may be on the verge of a trend reversal, with LTC likely to see a dip to the $157-range if the $193-support level fails. This would be true primarily because of the strong support range LTC has built up around its second support in the past, a level that can help stabilize LTC’s price if the bears take over the market.