Litecoin price receives trifecta of elements that underpin LTC before popping 13%
|- Litecoin price action is set to slide lower in search of support as the global mood is gloomy.
- LTC is helped by three supportive elements about to kick in.
- Expect a small dip before LTC skyrockets back to $65.
Litecoin (LTC) price slipped another 3.5% intraday during the European trading session as it already took a step lower during the ASIA PAC opening session this week. Risk-off sentiment got activated in the markets as China had to report lockdowns again in some residential areas. A five-day lockdown to curb covid contamination seems to be the norm. This put pressure back on the supply chain and lifted inflation expectations in a domino effect, putting risk assets on the selling list for the coming days.
LTC price set to see a bounce higher
Litecoin price is thus being battered a bit this morning by global sentiment. Although that does not point to much upside, a silver lining comes with a triple supportive area coming into play. The first big supportive level is the 200-day Simple Moving Average (SMA) of $58.
LTC gets additional support if it undershoots the 200-day SMA near $57.12, which comes from the green ascending trend line that has seen many tests for both support. Should both the 200-day SMA and the ascending trend line not do the trick, the 55-day SMA is the last act of support as it kept price action supported at the end of October and currently comes in at $56 before spinning LTC up again toward $65 for a retest with 13% of gains in the books.
LTC/USD daily chart
Should the trifecta element not play out and bearish forces become stronger, expect to see bears piercing through this support level. The risk would then materialize with a drop toward the monthly pivot at $54 and trigger around 13% of losses for this week. A continuation toward $50 is possible, but that would be on the back of another one-off event, such as last week with the missiles from the Russia-Ukraine conflict striking Polish soil.
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