Litecoin used to be very bearish during the previous three months, as the lows kept getting lower until late June, while 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 trades 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 last several 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 since late last year. That moving average was broken by the middle of May, during that major crash but it seems like the 50 weekly SMA (yellow) took its place.
LTC/USD formed a hammer candlestick in the third week of July which is a bullish reversing signal and the reversal seems well underway now. The following 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 were 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 just above, from $172 to $180. The price has retreated down a bit, so Litecoin traders are aware of this resistance zone, so let’s see if we will see a decent pullback lower. If we do, then we will be inclined to open a buy Litecoin signal at the 20 SMA lower on the daily chart.
LTC/USD