The Litecoin market has been seeing significant growth in price since the beginning of the year. At the time of writing, LTC was returning 93% year-to-date to its investors.
LTC was being traded at $257.39 with a market capitalization of $17.22 billion. The digital asset just saw a bullish breakout, however, will it be able to maintain this high value going forward in the market?
Litecoin 1-day chart
Source: LTCUSD on TradingView
The Litecoin price was building higher within an ascending channel and witnessed a strong surge as the price broke out of the channel. LTC saw the price surge from $163 to $258 within 16 days and turned the prevalent bearishness into a bullish market.
However, LTC has been closely trading to the resistance at $258 and if it rejects this price level, the value may trade lower.
Reasoning
The surge in the value of the digital asset has resulted in increased volatility in the market. The divergence of Bollinger Bands has been an indicator of the rise in volatility, while, the signal line moved under the candlesticks. The signal line will be acting as a support if the price pushes lower.
Meanwhile, the relative strength index was noting that the digital asset was close to becoming overbought as its value hit 68. The market has been witnessing selling pressure evolve at this stage and if it escalates, the RSI will be pushed towards the equilibrium zone.
While the market switches trends, the momentum has remained high owing to the recent surge. The bullish momentum could help the asset to maintain its high value, but the rise in selling pressure could result in a correction.
Crucial level
Entry-level: $240.99
Take Profit: $191.84
Stop-level: $268.88
Risk to Reward: 1.76
Conclusion
The current Litecoin market has been fairly bullish. However, a rising sell-off could push the price of the digital asset lower under $200. With 50 moving average and the signal line extending support close to $200, the price may not drop beyond this point.