• Litecoin price continues to recover from last week's market-wide sell-off.
  • LTC is better positioned than most to initiate a strong and sustained rally.
  • Downside risks exist but are likely limited in scale and scope.

Litecoin price consolidates after retracing 30% of the losses it experienced last week. It is now incumbent on the bulls to maintain the present value area and maintain momentum to prevent further losses.

Litecoin price his extreme lows and is poised for a violent bullish reversal

Litecoin price action has been some of the most bearish in the entire major market cap crypto space. While many altcoins hit new 2022 lows and multimonth lows, few fell far enough to hit lows not seen since 2020. LTC collapsed last week to a low of $54, a level not seen since November 2020.

A result of the size of the drop has positioned Litecoin for a massive bullish mean reversion trade – possibly a broader trend change. On the monthly, weekly, and daily charts, Litecoin price has developed large gaps between the bodies of the candlesticks and the Tenkan-Sen. Additionally, oscillator values have hit new all-time lows or have matched historical all-time lows.

A hypothetical long opportunity exists for Litecoin price on the $2.00/3-box reversal Point and Figure chart. The setup is a buy stop order at the 3-box reversal from the current O-column (currently at $74), a stop loss of four boxes (currently at $66), and a profit target at $104.

The setup represents a 3.75:1 reward for the risk. In addition, a two to three-box trailing stop would help protect against any profit made post entry.

LTC/USD $2.00/3-box Reversal Point and Figure Chart

The long trade setup for Litecoin price is based upon a failed bearish continuation from a Pole Pattern. Therefore, the setup is contingent on the current O-column not retracing printing a new O at or below $64. If that occurs, then the trade is invalidated.

Downside risks are likely limited to the lows in the $54 value area from last week.

 

Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Cryptos feed Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Weekly Forecast: Assessing chances of one last bear market rally for 2022

Bitcoin Weekly Forecast: Assessing chances of one last bear market rally for 2022

Bitcoin price is in a good place to trigger another bear market rally from a high-time frame perspective. This development, combined with the optimistic outlook seen in on-chain metrics, further strengthens the possibility of a happy ending to 2022.

More Bitcoin News

Uniswap price could kick-start a 14% rally if it reclaims this level

Uniswap price could kick-start a 14% rally if it reclaims this level

Uniswap price has been following the broader market bullish cues over the last few days sustaining its rise from 48 hours ago. Although the sentiment seems to have shifted slightly, UNI holders can still book profits if the Decentralized Finance (DeFi) token climbs to this level.

More UniSwap news

ATOM price suggests bears are still in control for these reasons

ATOM price suggests bears are still in control for these reasons

Cosmos price is producing a countertrend rally after suffering a steep decline throughout the month. If market conditions persist, ATOM could wipe out newly established bullish positions. Key levels have been defined to gauge ATOM’s next potential move.

More Cosmos news

Cardano Price Prediction: A new yearly low before the bounce

Cardano Price Prediction: A new yearly low before the bounce

Cardano price has suffered a vicious downtrend move throughout November. Ss price consolidates, the technicals suggest a bounce occurs while on-chain metrics hint that investors are considering securing profits sooner than later.

More Cardano news

Bitcoin: Assessing chances of one last bear market rally for 2022

Bitcoin: Assessing chances of one last bear market rally for 2022

BTC is in a good place to trigger another bear market rally from a high-time frame perspective. This development, combined with the optimistic outlook seen in on-chain metrics, further strengthens the possibility of a happy ending to 2022.

Read full analysis

BTC

ETH

XRP