In line with the collective crypto industry, Litecoin has undergone a very steep price change in the last 5 days. Although a period of consolidation was anticipated after the rally on 29 April, the sideways trend persisted and the community anticipated a bullish rally at any time. However, things could take another turn in the charts, and market analysis indicates that a bearish turnaround could take place sooner than later.
Litecoin 1-day chart
From a long-term perspective, the price of Litecoin has continued to shift within the trend lines of the ascending channel. The channel has been taking shape since March 12th and reported higher rates at $40, $44 and $46 with the upper trend line.
Following an ascending path, a bearish breakout is the predicted outcome, and over the next few weeks, Litecoin may witness a $42 re-test support. The possible reversal zone is between $42 and $39, and given that LTC is unable to move through another bullish rally, the token may drop to $42 or $39 before attempting to break the long-term resistance to $54.
The key sign is that Litecoin was unable to move above the 200-day Moving Average during the recent rally. The 200-MA (yellow line) remained active at the time of writing.
Litecoin 4-hour chart
Unfortunately, the Litecon trend did not look vibrant at the 4-hour map as well. The creation of a descending triangle is a clear indicator that the coin faces a short-term bearish breakout.
Solid support was $44 and long-term support was $39, but according to the VPVR indicator, the checkpoint (Red Line) was $41.41.
The market indicator indicated that the trading volume of $44 has been significant over the past month, which is why it should provide good support for a bounce back. If $44 support is unable to sustain the falling level, $42 will be the last strong price range beneath the imminent collapse.
The Relative Strength Index or RSI showed a strong selling pressure in the charts, as all the indicators pointed for a bearish breakout.
Unless Bitcoin has a major say over the next few days, Litecoin is primed for a bearish pullback down to $44 or $42 over the short term, and may re-visit the price range between $42 and $39 at the end of May.