- Litecoin has gained over 30% on a week-to-week basis and become the best-performing digital asset out of the top-10.
- The technical indicators signal that the coin may be ready for a short-term downside correction.
LTC/USD hit the highest level since February 2020 at $83.91 during early Asian hours and retreated to $81 by the time of writing. Despite the downside correction, LTC has gained over 10% on a day-to-day basis and nearly 32% in the last seven days.
LTC bottomed at $41.6 on September 27 and has been growing steadily ever since amid the global recovery on the cryptocurrency market. It is the 6th largest digital asset with a current market capitalization of $5.3 billion and an average daily trading volume of nearly $7 billion.
The downside correction is around the corner
While currently, LTC is an apparent growth leader of the week out of top-10 coins, the situation is about to change any minute.
TD sequential indicator has already printed eight green candlestick on 4-hour and daily charts, meaning that the upside momentum is fading away and the price is ready to reverse.
Litecoin, 4-hour and daily chart
Sure enough, the bearish scenario requires confirmation as the sell signal on a daily chart will come within the next 24 hours. It means that Litecoin has the potential to extend the upside a d retest a new 2020 high before the correction starts. However, the traders should be extra careful at this stage.
Litecoin's price forecast
Meanwhile, IntoTheBlock's "In/Out of the Money Around Price" model shows that LTC/USD faces a minor resistance on approach to $84 as over 22,000 addresses had previously bought 365,000 LTC between the current price and $83.5.
LTC In/Out of the Money Around Price
This supply wall may slow down the bulls and create a pre-condition for a correction with the first target at $80, where 18,000 addresses had purchased nearly 700,000 million LTC. This support can absorb the bearish pressure, preventing Litecoin from falling further. If this area gives way, the sellers will bum into another significant barrier on approach to $75.
All in all, the IOMAP picture implies that LTC bears will have a hard time pushing the price down due to a thick layer of support barriers located all the way down to $68.
Meanwhile, on the upside, a sustainable move above $84 will allow for an extended recovery towards $86 and $90.
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.