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Litecoin faces doom & gloom scenario: 16% upside or 16% plunge?

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Litecoin aka the silver to Bitcoin’s gold has consistently surged since its dip on 13 March. At press time, the daily bullish candle had been overwhelmed by the bears. At $40 apiece, Litecoin was facing the formation of an ascending triangle pattern, one that might push its price even higher.

However, with too much global uncertainty, the chances of this going awry are high. The uncertainty in the stock market was recently seen permeating the cryptocurrency markets. This caused a gaping hole in many investors’ portfolios. However, since this point, the prices have managed to recover most of their losses.

1 Day

Source: LTC/USD on TradingView

Due to the formation of an ascending triangle, the daily time frame of Litecoin seemed bullish. As seen in the chart, the pattern was ripe and due for a breakout. The VPVR indicator showed LTC’s price was at the most traded price point zone [from December 2019 to March 2020]. Hence, this was acting as resistance and breaching this would be bullish, however, a pullback after testing this level would be bearish for the coin.

Further, the price of Litecoin, at the time of writing, was well-above the PoC [Point of Control], which was slightly bullish, at least till the price manages to hold above it.

The Daily Moving Averages, 50 and 200, are both heading lower after the catastrophic dump in price. However, the movements of the 50 and 200 DMA have reopened the possibility of a death cross formation.

As mentioned in previous articles, a death cross is when the 50 DMA heads under the 200-DMA and generally, this signifies the start of a bear market [not to be used as a stand-alone indicator]. Hence, a successful formation of a death cross would imply a bearish regime for LTC.

Hence, if the price manages to surge higher, there will be room for a ~16% increase in price, before reaching resistance at $48.25. The same can be said about the dip, should the price manage to breach resistance. A ~17% plunge can be expected based on the VPVR and LTC’s price could end up at $33.84.

Conclusion

Litecoin is stuck with a dilemma – a 16% surge or drop? This dilemma hinges on if the price manages to resolve its resistance at $40.14 or the VPVR. Based solely on this, the price will either go up or down, to $48.25 or $33.84.

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Akash is a full-time cryptocurrency writer and an analyst at AMBCrypto. He is an engineering graduate with an avid interest in finance and economics. Attracted to the chaos of trading, Akash has invested in BTC, ETH and XRP for educational purposes.
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