Key Takeaways
Litecoin exhibits notable price action across multiple time frames, reflecting a confluence of Elliott Wave patterns and key Fibonacci retracement levels.
While the daily chart highlights a broader corrective structure nearing completion, the 1-hour chart provides insights into potential short-term trajectories.
Here, we break down the market dynamics, assess momentum, and project future price pathways.
The daily chart reveals Litecoin is in a corrective structure following a sharp rally to $146 on Dec. 5.
This move marked a significant test of a long-term descending trendline, which continues to act as a ceiling for bullish momentum.
After the rejection at this resistance zone, LTC retraced sharply to test the 0.236 Fibonacci retracement level at $123.42, where the price now consolidates as successfully predicted in our previous analysis.
From an Elliott Wave perspective, the rally to $146 could represent the termination of a higher-degree five-wave impulse.
The subsequent decline was expected as the corrective ABC structure. The sharp rejection and consolidation at 0.618 Fibonacci retracement zones support this wave count, and an increase followed.
However, the price of LTC failed to exceed its $146 high on the next run-up, only coming to $140 on Jan 17 before another downturn, questioning the bullish outlook.
The Relative Strength Index (RSI) on the daily timeframe is neutral but declining, reflecting the weakening bullish momentum. A sustained move below $109.44 (0.382 Fibonacci retracement) could confirm the continuation of the correction toward deeper support zones, including $98.15 (0.5 Fibonacci level).
The 1-hour chart shows the detailed count for LTC since its $146 high with two outcomes ahead.
The price finished its first ABC correction on the 0.618 Fib at $86.86, but the following rise to a high of $140 could be the second ABC correction as the X wave of the higher degree WXY.
Its current downtrend entered below the $117 high of the A wave, invalidating the possibility of a five-wave impulse from the Dec. 20 low.
Although the outlook in which we are seeing the third ABC has more downsides to come, in the short term, a recovery is expected.
If bullish momentum persists, Wave B could extend further into a potential zigzag structure, testing higher resistance near $130 before resuming downward.
A bullish breakout beyond $123.42 would invalidate the current bearish count, suggesting the beginning of a new impulsive wave targeting $146.
RSI on the hourly timeframe shows mild recovery but remains in neutral territory, indicating caution among traders. Volume data also supports this indecision, with no current trend bias.
Litecoin’s price action indicates a pivotal moment, with bullish and bearish scenarios dependent on key levels and patterns.
Traders should monitor the reaction at $123.42 to gauge the likelihood of continuation versus reversal.