Litecoin (LTC), which has endured a 28% correction within the past month, could be on the verge of a major recovery. This development comes after CCN observed changes in the technical setup.
At the beginning of the month, Litecoin’s price was $130. But today, the coin wobbles below the psychological support of $100.
This decline led to the formation of a bearish pattern, historically indicating an extended correction. However, other indicators suggest a potential invalidation of the bearish thesis.
According to the daily chart, Litecoin’s price correction from the $130 peak helped form a bearish flag. A bearish flag is a pattern that indicates the continuation of a downtrend.
It begins with a sharp price drop (the flagpole), followed by a brief consolidation (the flag). Later on, this pattern triggers a worse decline than the first price drop.
Despite the bearish flag formation, CCN noticed that the Moving Average Convergence Divergence (MACD) seems ready to invalidate the bias. First, the MACD reading, which measures momentum, has reversed to the positive region.
This reversal indicates bullish momentum. Beyond that, the Exponential Moving Average (EMA) tied with the MACD has also formed a golden cross.
A golden cross appears when the shorter EMA crosses above the longer one. As seen below, the 12 EMA (blue) has crossed over the 26 EMA (orange), validating the bullish trend.
LTC/USD Daily Chart | Credit: TradingView
In line with this movement, the Money Flow Index (MFI) reading also climbed above the midpoint. The rise in the MFI rating indicates increasing buying pressure.
From an on-chain perspective, the In/Out of Money Around Price (IOMAP) reveals that LTC might surge past $100 soon. With the IOMAP, one can spot support or resistance by measuring the volume of coins in profits or losses.
Higher accumulated losses at a specific price range typically strengthen resistance. However, in Litecoin’s case, the volume of purchases at an average price of $91.05, now in profit, surpasses those bought between $92.48 and $106.32.
Litecoin In/Out of Money Around Price | Credit: IntoTheBlock
Therefore, this support level will likely help breach the upper resistance points. If buying pressure increases, LTC’s price might break above $106.
LTC Price Analysis: Next Leg Up Coming
Analysis of the LTC/USD 4-hour chart also seems to present a similar outlook. Based on the image below, the Chaikin Money Flow (CMF) on the mentioned timeframe, has climbed above the zero signal line.
The CMF indicator tracks the movement of capital in and out of a cryptocurrency, helping to identify the accumulation and distribution phases. When it increases, it indicates rising buying pressure.
A decrease, on the other hand, indicates otherwise. Since it is the former, Litecoin’s price is likely to breach the 0.618 Fibonacci level at $103.77.
If validated, LTC’s next target could be around $117.69. Should buying pressure intensify, the altcoin’s value could rally to $126.31.
Failure to break past the 0.786 Fib level might invalidate this prediction. If that happens, LTC’s price might slide to $81.22.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Victor Olanrewaju is a crypto analyst and reporter at CCN with deep roots in on-chain research and technical analysis. His crypto journey began in 2017, but it was the 2020 Uniswap airdrop that sparked a full-time pivot into the space.
With a foundation in copywriting, Victor honed his craft creating high-converting content for leading crypto brokers — most notably an XRP price prediction that ranked #1 on Google during the 2021 bull run.
He later joined AMBCrypto in 2022, where he combined storytelling with technical and on-chain analysis to cover key market narratives.
In 2024, he expanded his expertise at BeInCrypto, collaborating with analysts and using tools like Glassnode, Santiment, and IntoTheBlock to break down Bitcoin and altcoin trends.
At CCN, Victor covers the top cryptocurrencies, memecoins, macro shifts, blending real-time insights with deep-dive metrics.
He holds a Bachelor’s degree in Physics from the University of Ibadan, equipping him to simplify complex data for a wide audience. Follow his work or connect on LinkedIn or X.
