Litecoin Tests Monthly Pivot at $104 as Momentum Resets From Overbought Territory
Market Structure Shifts Higher
- Litecoin (LTC/USD) continued to surge higher today and is now up 8.3% over the past week.
- Most of the crypto market remains elevated from the January 10 bullish breakout, sparked by Bitcoin’s move to $9,600.
- Most coins are currently maintaining those gains and consolidated positions during the week, with Litecoin taking the lead over the past week.
Litecoin made a strong recovery for the week increasing by 8.3% to $103.5 as the 50-EMA support held buyers. This recovery continues a 14.6% loss since the beginning of December and has seen LTC rise to test monthly pivot resistance. Fundamentals behind the rally this week included a resurgence in crypto-ETF interest – with XRP’s new market capturing $26 million in opening transactions compared to Litecoin’s low-volume ETF debut, it was evident that “a rising tide lifts all boats”. The main question now is whether LTC will hold above $104 and continue to the next level of resistance or whether December’s rally will be able to continue defending their spot.
| Metric | Value |
|---|---|
| Asset | LITECOIN (LTC) |
| Current Price | $103.50 |
| Weekly Performance | 1.50% |
| Monthly Performance | 8.29% |
| RSI (Relative Strength Index) | 54.5 |
| ADX (Average Directional Index) | 19.9 |
| MACD (MACD Level) | 0.35 |
| CCI (Commodity Channel Index, 20-period) | 85.16 |
RSI Cools to 54.5 Without Breaking Bullish Structure
The Relative Strength Index (RSI) for Bitcoin is currently at 54.53 on a daily, healthy pullback from the overbought 70+ readings that had the market correcting in December. This middle ground position shows that there isn’t an overwhelming control of the market by either the bears or the bulls, and that there is room for momentum in either direction. A noteworthy factor is that the oscillator held support above 45 during the entire pullback – indicating that the selling pressure never hit capitulation.
Based on prior recoveries during this bull market, a breach of the late-September low at 51,089 would improve the risk/reward for buyers, as it implies a move to the bull trend from July, currently around 50,000. To the topside, the 20-DMA at 53,899 would be an obvious infection point on the latest bounce. But because the six-month sub-50 WMA problem has been eliminated the focus above there would be the April/May/March highs, each around 57,000.
ADX at 19.9 Signals Range-Bound Conditions Persist
The trend strength is still weak with an ADX at 19.9, but it tells us nothing good as it looks like Litecoin is still not ready for a strong directional movement, while choppy, sideway price action could prevail a bit longer. In other words, this low reading suggests that there are no leaders between buyers and sellers yet, thus, there is no surprise that the price is bouncing back and forth between $94 support and $104 resistance.
In other words, this Forex market volatility indicator confirms your suspicion that consolidations shouldn’t be eagerly traded, and that you should prepare for bigger price movements when ADX rises. Traders are also increasingly likely to sell in a trading range and buy at support in an uptrend. Just like the last Forex market volatility indicator we are discussing, the ADX applies a higher reading to stronger trends. While the osciallatory effects of trading are minimized with this calculation, many third-party programs move these lines between 0-100.
50-Day EMA at $100.91 Flips From Resistance to Critical Support
The EMA structure implies that LTC must breach this level and close atop the 100-day EMA before an assault can be staged on the 200-day EMA overhead at $117.23. This average last acted as a support floor in mid-November, but resistance earlier in the month constrained the rally. By then, the Litecoin bulls woudl be stepping back in if LTC can mount a close above the 100-day EMA. The MACD looks ready to roll over and try to cross above the signal line.
What is most notable here is the pinch between all the short-term means in the $98-$103 neighborhood, which creates a decision level. Bulls must preserve the level above this EMA cluster to keep the convalescence intact, with the 50-day at $100.91 acting as the line to protect. A close above the 100-day EMA at $103.12 would support a 200-day EMA resistance approach in the vicinity of $104.30.
Resistance Stacks Between $104.31 and $113.52 December High
There are several resistance levels above the current price for buyers to breach. The first one is at $104.31, where the 200-day EMA and the monthly pivot point coincide, which prevented the price from rising further on two occasions over the past weeks. Should buyers cross that threshold, the weekly high at $113.52 will likely pose an additional hurdle as it coincides with the December high and equates to an approx. 10% upside potential.
The support architecture appears stronger after the 50-day EMA was able to keep dips in check this week. The $100 level serves as psychological support first, with the added cushion of the 50-day EMA at $100.91. Next in line is the 20-day EMA at $98.73 as secondary support, with stronger support in the $94.76 area, as the monthly S1 pivot point matches with recent low prints.
The market structure indicates a series of HLs since the December low, and bulls have held the $100 reclaims. Which should show a series of accumulation in price and is right. However, the four-hour chart shows a series of lower highs (LH), so we may not be out of the woods just yet. Since we have two differing time frames doing two divergent things, you should be well aware that the next move should be a violent one.
Bulls Target $113.52 Retest if $104.31 Resistance Falls
If Litecoin manages a daily close above $104.31, the path of least resistance strengthens to the upside toward the December peak of $113.52. This eventual scenario increases in likelihood if Bitcoin’s current stock of volatility pushes the price to the upside as past correlations indicate LTC commonly exaggerates Bitcoin’s moves to the upside. The decisive indicator here is if RSI pushes above 60 while ADX trends higher – indicative of solid trend strength.
If the current price heads toward the resistance cluster around $107.77, it will make a higher high after pushing above the recent peak. This is usually a bull signal, though not enough on its own to confirm a rally. Need the 50-day EMA to cross the midway point as the price levels.
Based on a technical setup and broader market conditions the most likely short-term direction for Litecoin is a consolidation between $100-$104 as momentum oscillators unwind from overbought conditions. The convergence of moving averages and low ADX reading highlight the potential for a larger expansion with a break of the noted consolidation determining whether $113 or $94 comes into play.
