The Litecoin price is in consolidation mode below June’s high. However, if LTC comes back too much, it risks forming a bearish chart pattern.
Litecoin (LTC) is trading at $138.86, down $2.38 (-1.67%).
The recent rally in LTC is slowing following Bitcoin failure to hold above $40,000. As BTC tracks lower this morning, it leaves altcoins, including Litecoin, vulnerable to profit-taking.
However, the bulls will be encouraged by the coin’s recent resilience. Despite retreating 8% from Fridays $151.79 high, LTC is still higher by 45% from the $103.28 low of the 20th of July.
As a result of the recent rally, a bullish double bottom was formed on the daily chart. But, if this pullback accelerates, an equally significant bearish double top will emerge. Therefore, the Bulls will hope the rally is pausing and not faltering.
The daily chart highlights the bullish double bottom at $103.00, just above the psychological $100 big figure.
Furthermore, horizontal resistance is visible at $153.00, which has proven a ceiling for the price following late June’s collapse. Furthermore, if LTC continues to retrace, $153.00 will be viewed as a double top.
The 50-day moving average at $135.45 is the first line of support just below the current price. A failure to sustain the 50-day would target the lower end of the horizontal trading band at $103.00 and therefore is a significant area of interest for the bulls.
Additionally, the relative Strength Index shows signs of rolling over, which suggests the bullish momentum is wavering.
Therefore, the technicals are pointing lower. Although, if the price can clear $153.00, the outlook improves drastically. In this event, the 200 DMA at $191.09 becomes an achievable target. And if that resistance succumbs, the door is open for a return to May’s $417.63 high.
But for that to have any chance of happening, Bitcoin needs to claw its way back above $40,000, and preferably fast.
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