Litecoin (LTC) has emerged as one of the rare winners within the ongoing cryptocurrency market meltdown led by the FTX exchange’s collapse.
LTC worth outperforms BTC, ETH
The 2011-born altcoin rallied almost 16% month-to-date (MTD) to achieve $62.75 on Nov. 22, outperforming its high rivals, Bitcoin (BTC) and Ether (ETH), which misplaced roughly 25% and 30%, respectively, in the identical interval.
Moreover, the LTC/BTC worth additionally rallied to new heights, gaining 50% in November to ascertain a brand new yearly excessive of 0.003970 BTC on Nov. 22.
As Cointelegraph reported, Litecoin diverged from the broader cryptocurrency market downtrend earlier this month with its halving slated for August 2023. LTC has additionally acquired an endorsement from none aside from Michael Saylor for being a Bitcoin-like “digital commodity.”
Michael Saylor says #Litecoin can be probably a digital commodity like Bitcoin: pic.twitter.com/7N19IpxtSe
— Altcoin Each day (@AltcoinDailyio) November 18, 2022
Nonetheless, indicators of bullish exhaustion are rising.
Litecoin worth fractal hints at 50% correction
Litecoin’s rally versus Bitcoin has made the LTC/BTC pair overvalued, based on its weekly relative power index (RSI) studying.
Notably, LTC/BTC’s weekly RSI, which measures the pair’s velocity and alter of worth actions, surged above 70 on Nov. 22. An RSI studying above 70 is taken into account overbought, which many conventional analysts see as an indication of an impending bearish reversal.
Traditionally, Litecoin’s overbought RSI readings versus Bitcoin have been adopted by main worth corrections. As an illustration, in April 2021, the LTC/BTC RSI’s climb above 70 met with a powerful sell-off response, finally pushing the pair down by 75% to 0.001716 BTC by June 2022.
Equally, an overbought RSI in April 2019 led to a 70% LTC/BTC worth correction by December 2019.
The identical RSI fractal now hints at Litecoin’s risk of present process a 50% wipeout versus Bitcoin if coupled with LTC/BTC’s multi-year descending channel sample, as proven beneath.
Usually, LTC/BTC turns overbought after hitting the channel’s higher trendline, which follows up with a correction towards the decrease trendline.
Consequently, the pair dangers dropping to or beneath 0.001797 BTC by December 2022 if the fractal repeats, down greater than 50% from the present worth ranges.
Conversely, a decisive breakout above the higher trendline might have LTC/BTC check its 200-week exponential transferring common (200-week EMA; the blue wave) at 0.005319 BTC, up 30% from present worth ranges, as the subsequent upside goal.
LTC/USD pair “bear flag”
Litecoin is eying an identical worth crash versus the US greenback because it paints a bear flag sample on the weekly charts.
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Bear flags are bearish continuation patterns that seem when the value consolidates larger inside a parallel, ascending channel vary after a powerful transfer decrease (known as flagpole). They resolve after the value breaks beneath the decrease trendline and falls by as a lot because the flagpole’s top.
LTC has been buying and selling contained in the bear flag vary, eyeing a breakdown beneath its decrease trendline help of round $55. The bear flag draw back goal is round $32.40 if it breaks decisively beneath the stated help — i.e., a 50% decline by December 2022.
This text doesn’t include funding recommendation or suggestions. Each funding and buying and selling transfer entails danger, and readers ought to conduct their very own analysis when making a choice.