Litecoin posted an impressive rally of nearly 25% over the past week as it crossed crucial levels. For the most part, the fifth-largest cryptocurrency has struggled with the $120-level, however, following the latest Bitcoin-inspired bullish swing, the previously crucial resistance has now turned support. However, the bearish undertone was visible as several altcoins noted pullbacks in the past day.
After a mild choppy start, Litecoin took a plunge of 2.23% over the last 24-hours which pulled the price down to $129.83. At the time of writing, the silver crypto registered a market cap of $8.41 billion and a 24-hour trading volume of $9.122 billion.
Litecoin [LTC] Daily Chart:
Litecoin’s one-day chart suggested that the price was in a mega bearish rising wedge pattern. This formation could induce a price break to the downside triggering a potential retest to lower levels. But if the daily moving averages are considered, the overall sentiment was found to be bullish.
An important aspect to consider was the movement of the 50 DMA [Pink] which moved upwards in tandem with the rising price candles and despite several corrections, it had failed to move above them. The rising gauge with respect to the 200 DMA [Purple] further validated a bullish sentiment.
On a cursory glance, the technicals depicted a bullish outlook. But there was more to the picture. The OBV indicator showed strong yet consistent volumes behind the current positive price action. However, both the RSI and the Stochastic RSI depicted a bearish divergence creating an overbought reading followed by a lower high that matched corresponding higher highs on the price.
As depicted by the above charts, on a relatively lower timeframe the bullish hint continued, even as the price formed a bearish rising wedge pattern. However, over a higher timeframe, the price did not look promising meaning that Litecoin has topped off and was heading for a downtrend in the coming days.
Important target points for Litecoin stood at $145.3 and $168 respectively if the bulls manage to cut through the downward pressure. In addition, the support level for the coin stood at $102.4 and $71.84.