Litecoin rallied a bit on Tuesday as the $120 level has offered support. This is an area that I think will continue to see buying opportunities present themselves, but if we can break above the 50 day EMA, currently sitting at the $139.65 level, then it is very likely that we would continue to go towards the $150 level next.
On the other hand, if we were to break down below the $120 level, then it is likely that we would see a little bit of negativity, perhaps opening up the possibility of Litecoin going all the way down to the $100 level. This would probably go right along with a lot of “risk off” type of behavior, which would have people flowing towards the US dollar and away from riskier assets such as crypto. Speaking of which, you need to pay close attention what is going on with Bitcoin, because it does have an effect on everything else in this entire market area. The volatility will continue to be an issue, as the markets are moving based upon a tightening Federal Reserve policy, geopolitical risks, and inflationary concerns. That being said, most crypto market participants do not follow a lot of this line of thinking, but they are no different than any other market, other than the fact that they do tend to be a bit more volatile.
Simply put, you need to pay close attention to what is going on with the US dollar. If the US dollar strengthens, you have to keep in mind that you are trading the LTC/USD pair. In that sense, it is no different than trading a currency pair, as you are betting on one going higher against the other in relative strength. Litecoin obviously has other issues, as we have seen a lot of weakness in Litecoin previously, but it has a use case scenario, so that of course gives it a bit of a leg up on so many other crypto markets. Pay close attention to that 50 day EMA; I think if we can finally break above there, then we could get some momentum. Any break down below the $100 level would be rather negative for Litecoin, and could kick off even more bearish pressure.
