Litecoin (LTC) Price Prepares to Break $137 Resistance After Defending Key Support

Key Takeaways

• The MVRV ratio shows that Litecoin is in an undervalued zone that could help sustain the uptrend.
• The Supertrend validates the support, indicating that LTC’s price might break the overhead resistance.
• If validated, this analysis reveals that Litecoin is ready for a notable breakout above the hurdle ahead.

Between Jan. 31 and Feb. 4, the price of Litecoin (LTC) dropped from $130 to $101. However, as soon as the price attempted to decline again, it bounced to $106 due to support at $100.

After successfully defending this key support, technical indicators reveal that Litecoin’s price might soon break above a certain resistance. Can LTC finally clear this hurdle and open the door for further gains?

Litecoin Bulls Defend the $100 Support

One on-chain metric that suggests that LTC price could be ready to bounce higher is the Market Value to Realized Value (MVRV) ratio.

MVRV compares an asset’s market capitalization to its realized capitalization. This ratio helps determine whether a cryptocurrency trades above or below its fair value.

When MVRV is high, it suggests that holders have significant unrealized gains, increasing the likelihood of profit-taking. On the other hand, a low or negative MVRV indicates that many holders are at a loss, potentially indicating an undervalued asset and a buying opportunity.

During the period LTC price dropped, the 30-day MVRV ratio attempted to drop to the negative region. However, as the price hit $100, the metric’s reading bounced and is now 5.20%.

This rebound reinforces the idea that the $100 level strongly supports Litecoin. Historically, when this scenario plays out, the MVRV ratio tends to surge above 10% and even 50%, coinciding with a higher Litecoin price.

The daily chart also seems to agree with a higher value for LTC. As shown below, bulls have defended the support at $100.

Furthermore, the green line of the Supertrend is below the coin’s price. This indicates that Litecoin’s uptrend might continue. Assuming the red segment of the indicator was above the price, it would have indicated a downtrend.

With the support at $100 and the LTC positioned in an uptrend, the next target could be to break the resistance at $137.

LTC Price Displays Strength

In addition, the 4-hour chart validates the thesis that Litecoin’s price might trade higher. This is because of the position of the Parabolic Stop And Reverse (SAR) indicator.

The Parabolic SAR is a technical indicator that determines the price direction of an asset. When the dots are above the price, it indicates resistance and shows that the price can retrace.

But in this case, the LTC price is above the dots of the Parabolic SAR. If this trend continues and buying pressure increases, the cryptocurrency’s value might break the $137 resistance and rise to $141.15.

However, this trend might not be the same if Litecoin fails to rise above $118.05. In that scenario, the token’s value might decline to $94.96.

The cryptocurrency’s value might decline to $80.69 in a highly bearish situation.