Litecoin (LTC) Might Repeat History As Price Revisits Critical Resistance

Litecoin (LTC) Might Repeat History As Price Revisits Critical Resistance

Litecoin (LTC) is all set to repeat history once again as the price revisits a critical trend line resistance. The last time this happened, we saw LTC/USD break straight through the resistance to settle above the 50 day moving average. Considering that Litecoin (LTC) does not have much room to rally this time, we expect the price to break just above the trend line resistance so it can rest atop the 50 day moving average. We could see some sideways movement for a long time before the price rallies again. If Litecoin (LTC) follows the same cycle as before, we can expect it to trade sideways for the next several months before it breaks out. The weekly RSI is heavily overbought and the price is due for a sharp correction short term before it can rally further.

If Bitcoin (BTC) continues to rise through the remainder of the week, we could see LTC/USD make a small move to the upside before a prolonged period of sideways movement. This means that through the next few months, LTC/USD will keep on being indecisive until the next halvening nears. As the next halvening is due in August, we expect LTC/USD to rally aggressively before then. This is going to be a very important event for Litecoin (LTC), one that could see its price rise by more than 100% in a matter of weeks. After every halvening, the mining rewards are cut by half which means it will take twice as much resources for the miners to mine one Litecoin (LTC). Therefore, by simple supply and demand, the price of Litecoin (LTC) should double in value to say the least. However, as we know markets often react irrationally which is why the price could rise more than double during the weeks leading to the next halvening.

Litecoin (LTC) is currently trading above the 50 day moving average against Bitcoin (BTC) but it is extremely overbought on the weekly time frame. A pull back from current levels could lead to the 50 day moving average crossing below the 200 day moving average to form a death cross. This would be a very bearish development for Litecoin (LTC) and we can see LTC/BTC fall below its trend line support in the weeks ahead. Litecoin (LTC) has recovered briefly against Bitcoin (BTC) since November, 2018 but this recovery now seems to have run too far.

As Litecoin (LTC) already had a big run against Bitcoin (BTC) compared to most cryptocurrencies, we can expect it to retrace in the weeks ahead. However, the FOMO will return once the short term correction is over. Litecoin (LTC)’s halvening in August remains one of the biggest events of the year and traders who like to back cryptocurrencies for a short term to make the most gains would certainly flock behind Litecoin (LTC) as the halvening nears. This means that even though Litecoin (LTC) is overbought short term, we might see significant bullish interest return to this cryptocurrency in the months ahead. 

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