Litecoin rallied significantly on Wednesday, gaining almost 6% at the time of writing. The market has cleared the $135 level, but perhaps more importantly has found a bit of footing at the psychologically and structurally important $125 level. It is worth noting that we recently had the so-called “death cross” in this market, but most of the time I find that the indicator is rather late, so I do not read too much into it other than longer-term traders may look at it from a negative standpoint.
Nonetheless, it is worth noting that the area we find ourselves in right now has been important multiple times in the past, as the $125 level is an area that has attracted buyers at least a couple of times over the last several years. It is also worth noting that Bitcoin held the $40,000 level, so that has a “knock on effect” around the crypto world, lifting not only Litecoin but other coins such as Solana and Ethereum. After all, crypto has not disconnected itself, so we tend to move in the same direction as most markets.
Litecoin of course will be no exception, but it is worth noting that all crypto has seen a significant bounce, so I expect the momentum to continue in the Litecoin market, with a short-term target of $150 making quite a bit of sense. I also expect that we could probably break that rather quickly. If we do, then it opens up a move towards the 50 day EMA, currently sitting just below the $165 level. I do believe that this is a market that will continue to find plenty of value hunters, especially as we are at the lower end of the overall trading range for the last several years. Value hunters came back in and picked up Litecoin as one would expect with any security.
From an alternate standpoint, if we give up the $115 level, Litecoin would be in serious trouble and could break down significantly. I do not necessarily expect that to happen, but I also recognize that it is still a real possibility with the type of volatility that we have seen in risk assets across the board. Nonetheless, as long as Bitcoin does well, Litecoin should probably move right along with it.
