Litecoin (LTC) is the biggest gainer among the top 10 cryptocurrencies Monday, even as it’s inching closer to a key resistance level.
As of writing, LTC is changing hands at $228, as per data source CoinMarketCap. The world’s fifth largest cryptocurrency has appreciated by 6.83 percent in the last 24 hours, a feat that’s notable given other crypto market leaders were hardly ticking up earlier in the day.
A look at the individual markets reveals the trading volume in LTC/USDT (the litecoin-tether exchange rate) and LTC/BTC (the litecoin – bitcoin exchange rate) have increased by 12.9 percent and 11.9 percent, respectively. So, it could be said that investors are using alternative cryptocurrencies and bitcoin to accumulate litecoin.
The price rise could be also associated with litecoin Founder Charlie Lee’s tweet asserting his belief the cryptocurrency could overtake bitcoin cash in market cap this year. Further, Litepay, which will allow merchants and businesses to accept LTC for their services and products, will be launched today, and that seems to have garnered lots of attention from investors.
But while the positive news flow justifies the uptick in LTC, price chart analysis indicates the cryptocurrency is nearing stiff resistance zone of $230-$240.
The above chart (prices as per Coinbase) shows the hard fork rally ran out of steam last week in the range of $230 to $240. Thus, a convincing break above $240 would signal a continuation of the rally from the Feb. 2 low of $110.20.
However, it is easier said than done as the weekly chart shows indecision in the marketplace, despite the bullish doji reversal.
- As seen below, the last week’s candle has a small body and long shadows, suggesting both bulls and bears fought losing battles. (The upper shadow represents the week’s high price and the lower shadow represents the day’s lowest price).
- However, when viewed against the backdrop of the bullish doji reversal (of the previous week), it appears the bulls have suffered a defeat.
- Thus, pushing LTC above $240 might be a difficult task for the bulls.
- The odds of a bullish break above $240 are low, according to the weekly chart. A dip below $182.55 (Feb. 23 low) could yield a sell-off to $140.
- Only a daily close (as per UTC) above $240 (high volume breakout) would open doors for a sustained rally to $300.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase.
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