- Litecoin retreated from the recent high after a strong rally.
- The price may extend the decline if it fails to clear $130.
Litecoin (LTC) topped at $139.3 on December 27, and the bulls hit the pause button. At the time of writing, the token is changing hands at $128, down 4% on a day-to-day basis. Despite the retreat, it is still 25% higher on a weekly basis. Litecoin is highly correlated with Bitcoin. So the see-off of the pioneer digital currency from the all-time high at $28,250 dragged LTC down.
Currently, Litecoin is the 5th-largest digital asset with a current market capitalization of $8.5 billion and an average daily trading volume of $9.9 billion. The coin may soon outpace XRP as the token is losing ground rapidly amid legal issues with the SEC.
Litecoin is ready for a correction
As FXStreet previously reported, LTC experienced a strong bullish momentum that took the price from $70 to nearly $140. The price doubled in less than a month without any meaningful retreats.
The LTC has made several attempts to clear $130, but the upside momentum faded away each time the price moved above this area. This is visible on a daily chart. A sustainable move above this area is needed for the upside to gain traction with the next focus on $140 and $146, which is the highest level since June 2019.
LTC, daily chart
On the other hand, a failure to clear this barrier will result in a sell-off towards $100. This support is critical for Litecoin's bull trend. If it gives way, the immediate positive scenario will be invalidated with the next stop at $90-$87. This area served as resistance in November and December. Now it is also reinforced by the daily EMA50.
LTC, In/Out of the Money Around Price (IOMAP)
Meanwhile, In/Out of the Money Around Price (IOMAP) data confirms a strong resistance on approach to $130 as over 51,000 addresses purchased million LTC from $130 to $134. If this area is cleared, the buying pressure will increase. The price may quickly reach the next target of $146.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.