Litecoin is beginning to recover with buyers regaining control around a major support on the daily chart. The price has been on the rebound after breaking out of the long-term support zone.
This indicates that selling pressure could be lessening. This implies that there is a build-up which could cause a wider recovery.
An Early Accumulation Phase
GainMuse analysis indicated a clean bounce-off of a falling support line. The higher lows displayed in the chart reflect sound price action.
The market is slowly transforming towards being sold rather than bought. Buyers prevented further pullbacks and downside momentum.
The market structure is converging toward the next resistance, indicating that a shift in direction could occur if momentum builds. The trend in Litecoin is a gradual upward trend instead of an abrupt increase.
Source: X
Also Read | Litecoin (LTC) Consolidates Above Key Support: Is a Rally Toward $140 Next?
Bearish Pressure Is Fading
Following a prolonged period of bearish movement, momentum indicators have finally shown signs of stabilization. The reversal in downside momentum is also evidenced by the neutral RSI in the daily chart.
The MACD values are flat, that is, the negative values are no more, and the histogram bars are low, which indicates less bearishness. But it has not gone into a major bullish crossover. The combination of RSI and MACD implies a market reset and not a breakdown.
MACD and RSI. Source: TradingView
Volume Trends Prove Buyer Consumption
Volume is nearly the same as the average of the past 20 days. Pullbacks are experiencing less activity by sellers, implying that the traders are not eager to give up positions. This represents a slow increase in price with an increase in volume, as opposed to speculative spikes.
When the volume remains steady within the moving average zone, it is an indication of continuous interest in buying. This initiates upward trends but not any significant declines.
The OBV is up and close to the average 21-day volume, and there has been no significant drop in cumulative volume. This implies low capital outflow, even in a volatile market. With OBV stabilization, a period of consolidation and an accumulation stage usually follow. Buyers will purchase more of this token at lower levels as long as it remains below resistance.
Volumes. Source: TradingView
Litecoin Targets $88
Since the structure, volume, and momentum all work in unison, the focus shifts to the resistance. The first major test is around $88, which is in line with previous rejection levels using the daily chart. However, the rise towards $88 would demand a consistent growth in volume. The price is likely to consolidate in the absence of it.
Also Read | Litecoin (LTC) Price Stalls Near $82 As Long-Term Chart Signals Major Breakout Setup
