The Litecoin price is making a strong recovery after it dropped by more than 38% last week. The LTC price is trading at $253, which is 22% above its lowest level last week. It has a market cap of more than $16.4 billion and is the 10th-biggest digital currency in the world.
What happened: Litecoin is a digital currency that is similar to Bitcoin. It is one of the oldest cryptocurrencies in the world and is mostly used as an alternative to Bitcoin. Users love it for its speed and lower cost.
Investors, on the other hand, love it because its significantly cheaper than Bitcoin. Indeed, in an interview with CNBC, Litecoin founder compared its relationship with Bitcoin as that which exists between gold and silver.
In most cases, Litecoin and tends to move in the same direction as Bitcoin. When Bitcoin rises, it too rises at a higher degree, and vice versa. In fact, other cryptocurrencies, too, usually behave this way. So, what next for Litecoin?
The four-hour chart shows that the LTC price formed a double-bottom pattern at $210 recently. In technical analysis, this is usually a relatively bullish sign. Since then, the currency has jumped to above the 50% Fibonacci retracement level.
Also, the 25-day and 15-day moving averages have made a bullish crossover pattern. The price is also slightly below the descending trendline shown in blue.
Therefore, in my view, we could see another pullback as bears target the neckline of the double-bottom at $243. This will be invalidated if the price manages to move above this descending trendline.
In the long-term however, the price will remain in a bullish trend so long as it can maintain above the 50-day exponential moving average.
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