Litecoin got its mojo back this week.
Having spent a better part of the last month defending the key trend line support, the cryptocurrency is finally exploring above the $60 mark – clocking a three-week high of $63.71 yesterday.
At press time, the litecoin-U.S. dollar (LTC/USD) exchange rate is at $62.00 levels. As per CoinMarketCap, LTC has seen a 7.46 percent appreciation in value over the last 24 hours. On a weekly basis, it's up 13.38 percent.
So what's behind the sudden rally?
Some in the investor community believe that South Korean exchange Coinone's decision to add LTC to its platform is the primary reason for the spike in prices. The argument has substance, as Coinone is one of the biggest cryptocurrency exchanges in the country – now the world's third largest cryptocurrency market.
data indicates the rally has been fuelled by exchanges offering trading in litecoin/South Korean won pairs. Volumes on Bithumb, one of the biggest exchanges in South Korea, have gone up by 26.89 percent in the last 24 hours.
More generally, a 200 percent surge in trading volumes across all exchanges would seem to indicate that the price rally could have legs.
Elsewhere, an argument could also be put forward that litecoin may be seen as a safe haven for jittery bitcoin traders amid the uncertainty surrounding the fast-approaching Segwit2x hard fork.
Indeed, the price action analysis favors further upside for litecoin.
The above chart shows:
- The trend line drawn from the Sep. 21 low and Oct. 9 low acted as a strong support over the last month.
- Currently, LTC is trading above the trend line sloping upwards from the Mar. 30 low and May. 27 low.
- The relative strength index is above 50.00 (bullish) and pointing upwards.
The spike above $60 yesterday and the move above the long-term trend line level today, coupled with the bullish RSI, indicate potential for a rally to $69.59 (Oct. 15 high). A violation there would expose the expanding channel ceiling seen today at $85.70 levels.
On the downside, only a break below the trend line drawn from the Sep. 21 low and Oct. 9 low would confirm a bullish-to-bearish trend change and may open up downside towards $45.18 (Sep. 21 low).
Viewing scope image via Shutterstock
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