Litecoin has been very bearish during the past three months, as the lows kept getting lower until late June, and we didn’t see any decent bounce during most of July. But the sudden reversal in the crypto market came last month, and the sentiment has only been improving for Litecoin and other cryptocurrencies.
BITCOIN is trading at around $46,000, while ETHEREUM is making itself comfortable above $3,000, which means that the bullish trend has resumed again in the crypto market, after the pullback in the previous months. Litecoin has benefited from all the buying during the past few weeks, and has formed a bullish reversing chart pattern on the weekly time frame.
Litecoin Analysis – LTC/USD Weekly Chart
Litecoin bouncing off the 50 SMA after the hammer candlestick above it
Looking at the chart above, the 20 SMA (gray) was providing great support for LITECOIN during the strong bullish move that started late last year. That moving average was broken by the middle of May, during the major crash, but it seems like the 50 weekly SMA (yellow) has taken its place.
LTC/USD formed a hammer candlestick in the third week of July. This is a bullish reversing signal, and the reversal seems well underway now. The last three weekly candlesticks have been really bullish, with the price moving nearly $70 higher. So, the picture looks quite bullish on the weekly chart, and we don’t see any obstacles here until the 20 SMA, which comes at around $220.
Litecoin Analysis – LTC/USD Daily Chart
Will the 100 and 200 SMAs reverse Litecoin down
On the daily chart, the bullish move looks impressive, with the price climbing above the 20 SMA (gray) and the 50 SMA (yellow), which had been providing resistance and keeping Litecoin bearish since June. The break of those moving averages was a strong bullish signal, showing that sellers were retreating. But now, LTC/USD is facing the two bigger moving averages, which could hamper the bullish move.
The 100 SMA (green) and the 200 SMA (purple) stand slightly higher, from $172 to $180. The price has retreated down a bit, which means Litecoin traders are aware of this resistance zone, so let’s see if there is a decent pullback lower. If there is, we will be inclined to open a buy Litecoin signal at the 20 SMA, lower down on the daily chart.
LTC/USD