Can Litecoin (LTC) Trigger a "Santa Claus Rally"?
Date: 2023-12-21 Author: Dima Zakharov Categories: BLOCKCHAIN
Litecoin Forms Bearish Candle
Looking at the weekly timeframe, LTC's price has been declining along a descending resistance line since April 2021. In June 2023, the token briefly broke above this trendline but failed to sustain an upward move, resulting in a deviation (red circle) followed by a decline.
In October, LTC again breached the trendline (green arrow) but couldn't continue the ascent. Last week, the asset formed a bearish engulfing candle.
Source: TradingView
The current value of the RSI momentum indicator stands at 50, indicating an uncertain trend.
What Analysts Say
Cryptocurrency traders and analysts on the X platform are optimistic about LTC's prospects. World Of Charts believes that the price will rise to $300 after a bullish breakout from a long-term pattern.
Joao Devesa shares similar bullish views, suggesting that LTC will outperform BTC:
"My price predictions for #Litecoin in the coming months. Conservative target at 0.0125 at $100k per Bitcoin: $LTC = $1250. Aggressive target at 0.025 at $250k per Bitcoin: #LTC = $6250. That's where Litecoin should be during the next bull market."
LTC Forecast: Is a Correction Imminent?
The daily timeframe reflects a bearish outlook for LTC. Although the asset has been on the rise since August 17th, its movement has been contained within an ascending parallel channel.
Such patterns are often associated with correctional movements, implying that the price is likely to break below its lower boundary. Supporting this scenario is the fact that on December 9th, the coin rebounded from the Fibonacci 0.382 correction level (red marker) and is currently trading below the channel's midline.
The daily RSI also signals bearishness, breaking below the ascending support line (green color) and now residing below the neutral 50 mark. Both of these indicators point to a bearish trend.
If LTC breaks down, it could drop by 20% to the nearest support level at $58.
