• Litecoin is currently trading at $50 after hitting a crucial resistance level.
  • Several indicators are showing LTC is poised for a short-term pullback.

Litecoin had an excellent recovery from the low at $41.64 formed on September 21. The digital asset climbed 23% towards $51 and now faces strong resistance ahead. Over the past week, LTC has seen a notable increase in market capitalization from $3 billion to a peak of $3.35 billion on October 11.

Numerous indicators are in favor of Litecoin bears

Litecoin is currently trading at $50, right below a critical resistance level in the form of the 100-SMA on the daily chart. The TD sequential indicator has just presented a sell signal at this level, which hasn’t been validated just yet. Let's take a look at the daily chart for LTC.

LTC/USD daily chart

ltc price

On the way down, bulls find the 50-SMA, which will act as a support level in the short-term. Validation of the sell signal into a bearish breakout of the 50-SMA has the potential to drop the price of Litecoin down to the 200-SMA at $47, which should act as a support level.

LTC/USD 12-hour chart

ltc price

Furthermore, on the 12-hour chart, the TD sequential indicator also presented a sell signal, and the price is getting rejected from the 200-SMA while trying to defend the 100-SMA. The 12-hour chart shows a potential bearish target of $46, where the 50-SMA is established. 

LTC New Addresses Chart

ltc price

On top of that, the chart with new addresses joining the Litecoin network is showing a concerning trend. The number peaked at 71,830 per day on September 24 but has been declining ever since to a current low of 54,300, indicating that the interest in the digital asset is fading, despite the current bullish momentum.

LTC IOMAP Chart

ltc iomap

On the other hand, looking at the In/Out of the Money Around Price chart by IntoTheBlock shows strong support on the way down. The range between $49.4 to $50.8 has 2.55 million LTC in volume, while the resistance area from $51 to $54 only has 1.8 million in volume. Additionally, all the levels below $50 until $43 show similar volumes of LTC bought, which indicates that bulls still have a lot of strength. 

LTC/USD 4-hour chart

ltc price

On the 4-hour chart, LTC faces a resistance level at $51.3 tested a few times in the past on September 12 and September 4. A breakout above this level has the potential to push Litecoin towards $58 and even the $60 psychological level. 

Essential points to look out for

Although Litecoin had a strong bullish rally for the past two weeks, the digital asset could be on the verge of a short-term pullback. The most critical support level to look out for is the 50-SMA on the daily chart at $49. A breakout would lead LTC down to $46. 

On the flip side, it seems that bulls have established several healthy support levels on the way down. If Litecoin can climb above the resistance level at $51.3 on the 4-hour chart, the price could rise to $58 and even to the psychological level at $60.

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