Disclaimer: The findings of the following analysis are solely the views of the writer and should not be regarded as investment advice
Litecoin fans still appreciate it, and that’s the only reason it’s still around. Other than being seen as the currency for Bitcoin gold and having cheaper and faster transactions, it doesn’t seem to serve much purpose. However, given he survived the bear market and massive accidents, he seems to be doing something right.
Litecoin recorded a bump of 58% in the last 3 days, but declined 2.34% in the last 24 hours. The following article looks at the price of Litecoin and the possible scenarios.
Litecoin 1 day chart
Source: LTCUSD on TradingView
Despite a 58% surge in the last 3 days and a year-to-date enrollment [YTD] 182% return, Litecoin is nowhere near its highest ever [ATH]. In fact, Litecoin needs to surge 257% to hit its previous ATH of $ 420.
The attached chart highlights 3 important curves that are important, for the time being, the red curve, which extends all the way from 2017 to press time, cyan and purple curve, which extend from 2019 to press time.
The red curve has four major contact points, the 2017 peak and the 2020 peak, which was recently hit. The other two are also important as they are pre-bull spikes that evolved into a correction that caused the bull to run.
The purple curve shows the course LTC should have taken. However, given his recent parabolic surge, things seem to have gotten out of control. More often than not, parabolic surges lead to corrections, and finding these corrections could help – trade the correction, provide a long access site, or just an opportunity to buy more of the asset. The purple curve and cyan try to do exactly that. Therefore, we can estimate that the next drop will be towards the cyan curve.
Hold a knife falling
Source: LTCUSD on TraidngView
The attached chart clearly shows that the decrease is already occurring and using a trend-based Fibonacci level, we can conclude that the price appears to be facing upward pressure from the 0.786- Fibonacci, a level that caused it to fall.
If this continues and will be, as both the RSI and the Stochastic RSI are in the over-thinking zone and soon overturned, we can expect the fall to find support at the 0.618-Fibonacci level [$101.48] or the 0.5-Fibonacci level [$86.88].
This would mean that Litecoin could fall 10% to 12% soon. This will be the case as long as Bitcoin continues to move sideways or drop. However, if Bitcoin surges again, then altcoins, including Litecoin, will follow promptly.