Litecoin was one of the top gainers over the last seven days. A look at the daily chart shows why. We observed that the asset gained more than 15% during the previous intraday session. It may end the present session with gains exceeding 11%.
This comes after the altcoin peaked at $83 and retraced to its current value of $78. The question on everyone’s mind at this time is why LTC is soaring and who is buying.
Why is it Soaring?
There are several factors that contributed to the uptrends litecoin is experiencing at this time. One such is fundamentals. On November 9, the asset’s foundation announced that mining difficulty is on the rise.
This happened as the hash rates were below expectations. As a result, there was a decrease in supply. Based on the traditional laws of demand and supply, this situation was a recipe for a price explosion.
A closer look at the charts also points to a pattern. LTC tends to experience massive increases in the months leading to its halving. We are seeing a repeat of the same event and we may conclude that this is another reason for the uptrends. The charts offer further insight into the current market conditions.
Litecoin had a Bullish Divergence
On the daily chart, we observed a lot of movement, especially the indicators. One such is the Moving Average Convergence Divergence. We noticed that the 12-day EMA intercepted the 26-day EMA on Monday.
This heralded the start of the two-day consistent increase. In response to the current uptrend, the metric is also rising. We see the same effect on the Relative Strength Index as it surge above 70.
This also explains the reason for the drop in price after its peak. A closer look at the Moving Averages may raise concerns among the bears as LTC is set for a golden cross. RSI also answers the question of who is buying. There is strong evidence that the current rally was induced by retail traders.
A look at the chart above also points to the fact that the coin is due for a correction. We observed that it was overbought. Based on the metric we may expect a short-term downtrend before another high.
Key Levels to Watch
Vital Support: $70, $62, $57
Vital Resistance: $80, $85, $96
It is important to bear in mind that although litecoin peaked above $80, it is still a key resistance as it failed to sustain the drive above it. If the downtrend persists we may expect a retest of the $70 support.
If it fails or flips, the next price mark is $62. Before the attempt at it, we may see the decrease slow down at $65. Nonetheless, the toughest support in this list is the $57 barrier. On other hand, a flip of the $80 resistance may guarantee an attempt at the $85 barrier.
To retest $96, LTC must gain stability above $92. Although this mark does not experience consistent trends, it is vital as previous downtrends halted there.
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