• Litecoin price rose by 35% in January.
  • LTC shows potential to rally toward the $120 liquidity zone.
  • The uptrend potential depends on the $87 swing point remaining unbreached.

Litecoin price appears unfazed by the resistance formed above Bitcoin’s trillion-dollar market cap. Market makers may be eyeing the surplus liquidity resting in the mid-$120 zone.=

Litecoin price stair steps higher

Litecoin price has displayed strong uptrend behavior in recent days. In January, the bulls returned nearly 40% of the lost value to loyal investors. The uptrend shows all the signs that the gains can continue. While many in the crypto space are in disbelief due to the rapid change of market behavior displayed by all cryptocurrencies since January 1, the Litecoin price shows potential to rally an additional 20% from the current market value. 

Litecoin price currently auctions at $94.53. The recent uptrend move has displayed a significant amount of turbulence, which justifies the indecisive sentiment held by traders in the market. For instance, the largest candle within the rally still belongs to the bears, which occurred on November 8, when LTC fell by 15% from $67 to $57 in one day. 

During the recent 40% upswing, the largest green candle only displays an 8% gain at most, which occurred on Friday, January 20, when the Litecoin price rose from $83 to $90. Gauging the largest candlestick within an overall trend is a classical technical analysis technique used to decide who is a control of the larger narrative.

The Relative Strength Index (RSI), an indicator used to gauge the trend's underlying strength, shows short-term optimistic signals.  During the rally, the RSI breached overbought conditions and consolidates above the previous resistance zone. Because Litecoin has persistently established a new high every few days since January 1 without producing a lower low, the uptrend is still intact.

The bulls are likely aiming for the upper boundary of a descending trend channel that has impacted Litecoin's price action since early 2021. The liquidity above the barrier has remained unchallenged since 2022, when LTC fell 60% from $120 to the $40 lows. The bullish scenario creates a potential 27% increase in market value from the Litecoin current price.

ltc/2/1/23

LTC/USDT 1-day chart

Traders looking to enter the market may be able to use the 21-day simple moving average (SMA) as a tool to assess when the uptrend has reversed. A candlestick close beneath the barrier marked at $87 would invalidate the bullish potential. The bears could induce a much deeper decline by targeting liquidity levels as low as $68, resulting in a 27% decline from the current Litecoin price.

 

 


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