Litecoin price prepares for a 20% ascent as LTC reveals a bullish setup
- Litecoin price completed its bear trap after setting a swing low below the January 22 low at $96.39.
- The resulting upswing will propel LTC to contend with the $117.80 and $124.09 hurdles.
- A four-hour candlestick close below $91.61 will create a lower low and invalidate the bullish thesis.
Litecoin price is experiencing a pullback after it experienced a quick run-up. The price action prior to the minor rally plays a crucial role in identifying trend reversals; currently, it hints at a bullish outlook for LTC.
Litecoin price to recover its gains
Litecoin price set up a range, extending from $153.90 to $96.39 between January 17 and 22. Soon after the swing low was set on January 22, LTC rallied 48% and set up another range, stretching from $144 to $91.61.
The February 24 market trough at $91.61 sliced through the previous swing low, creating a market structure break (MSB) and suggesting that LTC could decline further. However, the MSB was a liquidity grab and a manipulation technique used by market makers to lure traders in the wrong direction before heading higher.
After the MSB, Litecoin price rallied 25% and is currently retracing to find stable support levels before triggering the second move up. Interested investors can enter a long position at the current position - $102.77 and expect it to rally higher.
The first hurdle Litecoin price will encounter is the 50% retracement level at $117.80; beyond this, LTC will take a swing at the 62% retracement level at $124.09, bringing the total run-up to 20%. Investors can choose to take profits at either of these levels.
LTC/USDT 4-hour chart
On the contrary, if Litecoin price fails to curb profit-taking, the retracement could push LTC to retest the January 22 swing low at $96.39. If the bulls fail to absorb the selling pressure, there is a good chance LTC might retest the range low at $91.61.
A four-hour candlestick close below $91.61 will create a lower low and invalidate the bullish thesis for Litecoin price. This move could open the path for bears to drag LTC to lower levels.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
