Litecoin initially tried to rally on Monday but then gave back the gains to show signs of hesitation. The $100 level of course is an area that will attract traders due to the large, round, psychological importance of this market. This is an area that we have seen support previously, and therefore it is likely that we see this area continue to be important.
If we were to break down below the $90 level, then it is likely that we could break down and go much lower, perhaps reaching towards the $75 level, maybe even the $50 level. This would be a simple continuation of the overall downtrend that we have been in for a while, as you can see by the “death cross” that formed a while ago when the 50 day EMA had dropped below the 200 day EMA. The 50 day EMA is significant in its importance, so it will be interesting to see whether or not that holds as resistance on any type of rally.
If we were to break above the 50 day EMA, that could open up the possibility of a move to the $125 level, possibly even the $150 level. It is at the $150 level that the 200 day EMA is sitting, so I think it is probably only a matter of time before sellers would come in at one of those junctions. If we were to break above all of that, then obviously this would be a very bullish turn of events and could send Litecoin much higher over the longer term.
The Litecoin market will follow Bitcoin, as it is a major influence on the rest of the currencies in the crypto markets, which of course includes Litecoin. As Bitcoin has been falling, it is hard to imagine a situation where Litecoin would be completely different. Furthermore, Litecoin is starting to lose a grasp on volume, so that of course is a major issue.
It is worth noting that the $100 level is starting to show signs of support, so if we can hang around here long enough, it is possible that this could be an accumulation zone. I would not jump in with both feet based upon trying to front-run that possibility, but it is worth knowing better than to do that, as you would simply be gambling.
