- Litecoin (LTC) shows potential for a bullish breakout if it can decisively move above the 200-day EMA, presenting a key opportunity for buyers.
- However, traders should remain cautious as a failure to do so could result in another retest of the $62 support level.
Litecoin (LTC) has recently exhibited signs of bullish pressure, but for a substantial buying edge, traders should wait for a decisive breakout above the 200-day EMA. Here’s why.
Current Market Scenario
Litecoin (LTC) has been in a slight downtrend recently, reversing from its 200-day EMA. This movement brought LTC down to retest the $62 support level, where strong buying pressure emerged, pushing the cryptocurrency above its 20-day and 50-day EMAs. As of now, LTC is trading at approximately $66.33, experiencing a 1.7% decline over the past 24 hours.
Bulls Eyeing a Rebound?
According to the latest daily chart, LTC’s rebound from the $62 support level has positioned it above the 20-day and 50-day EMAs. Currently, LTC is trading near these EMAs, marking a crucial inflection zone.
If buyers can drive the price higher from these EMAs, LTC may continue its upward trend, potentially targeting the 200-day EMA, which is around $71. However, a close below the 20 and 50-day EMAs could expose LTC to another retest of the $62 support level, delaying any recovery prospects.
Technical Indicators Show Potential
The MACD (Moving Average Convergence Divergence) indicator, while still in negative territory, is showing signs of a bullish crossover. The MACD line is moving closer to the signal line, and a definitive crossover could shift momentum in favor of the buyers. Conversely, if either of these lines dips below the zero mark, it would indicate increased selling pressure.
Derivatives Data: Mixed Sentiments
Litecoin’s derivatives data presents a mixed sentiment scenario. The 24-hour long/short ratio stands at 0.9654, reflecting a balanced trader sentiment. Notably, the long/short ratios on Binance and OKX are bullish, at 2.2862 and 2.55 respectively, indicating that traders on these platforms anticipate a potential upside in LTC’s price.
Open interest for LTC options has declined slightly by 2.95%, suggesting a degree of caution among traders due to recent price fluctuations. Meanwhile, liquidation data shows that long positions are dominating, with substantial liquidations of short positions over the past 12 hours, indicating that the bullish momentum may still have room to grow as short-sellers are forced to exit.
The Influence of Bitcoin
Traders should also monitor Bitcoin’s movements closely, as market-wide shifts are likely to influence LTC’s trajectory. For now, LTC is at a critical juncture, and a decisive move above or below the EMAs will dictate its near-term path.
Litecoin is currently hovering at a pivotal level. While short-term bullish signals are present, a clear breakout above the 200-day EMA is essential for a long-term buying edge. Traders should exercise patience and wait for a decisive move to ensure a favorable entry point.
