Altcoins

Litecoin’s bulls must look out for these divergences in price action

Disclaimer: The findings of the next evaluation are the only real opinions of the author and shouldn’t be thought-about funding recommendation

After its newest bullish rally, Litecoin (LTC) lastly noticed an in depth above its long-term liquidity vary (Level of Management/POC) whereas rising inside an ascending channel (white).

With the 4-hour 50 EMA (cyan) leaping above the 200 EMA (inexperienced), the bulls have steered the development of their favor over the previous few days. Now, as the worth retains testing the higher band of the Bollinger Bands (BB), it may see a short-term pullback in direction of the $115-mark. At press time, LTC was buying and selling at $119.2, up by 4.1% during the last 24 hours.

LTC 4-hour Chart

LTCUSDT 2022 03 22 13 05 19

Supply: TradingView, LTC/USDT

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Finally, the consumers stepped in on the 15-month-long help close to $90. Because of this, the altcoin registered over 30% ROI from its 64-week low on 24 February thus far. 

Whereas recovering from its earlier sell-off losses, it discovered an in depth above its 20/50/200 EMA. In the meantime, the 50 EMA undertook a bullish crossover with its 200 EMA. This studying entailed the bulls had taken cost of the development whereas they reclaimed the $116-support.

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Owing to the overbought readings on its BB, LTC may see a near-term setback in direction of the decrease trendline of its up-channel. Following this, it could almost definitely proceed its up-channel trajectory in direction of its three-month trendline resistance (white, dashed). Additionally, with the 20 EMA nonetheless wanting north, the bulls made it some extent to maintain the uptrend intact for some time. 

Rationale

Capture 38 scaled

Supply: TradingView, LTC/USDT

The RSI hovered close to the overbought area whereas marking decrease peaks over the previous two days. This studying confirmed the bullish vigor however disclosed a bearish divergence with the worth. Thus, affirming the opportunity of a near-term pullback earlier than a restoration.

Moreover, the OBV corresponded with the RSI by bearishly diverging with the worth. 

Conclusion

Contemplating the oversold readings on the BB with the divergences on the OBV and RSI, the alt positioned itself for a short-term pullback in direction of the 20 EMA. Quickly after, the bulls would possibly attempt to preserve their edge and goal for restoration on the $123-zone.

Furthermore, LTC shares a 72% 30-day correlation with the king coin. An in depth eye on Bitcoin’s motion could be crucial to make a worthwhile transfer.

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