Litecoin (LTC) has become among the rare winners within the ongoing cryptocurrency market meltdown brought through the FTX exchange’s collapse.
LTC cost outperforms BTC, ET
This Year’s-born altcoin rallied nearly 16% month-to-date (MTD) to achieve $62.75 on November. 22, outperforming its top rivals, Bitcoin (BTC) and Ether (ETH), which lo roughly 25% and 30%, correspondingly, within the same period.
In addition, the LTC/BTC cost also rallied to new heights, gaining 50% in November to determine a brand new yearly a lot of .003970 BTC on November. 22.
As Cointelegraph reported, Litecoin diverged in the broader cryptocurrency market downtrend earlier this year using its halving slated for August 2023. LTC has additionally received an endorsement from the one and only Michael Saylor as a Bitcoin-like “digital commodity.”
Michael Saylor states #Litecoin can also be likely an electronic commodity like Bitcoin: pic.twitter.com/7N19IpxtSe
— Altcoin Daily (@AltcoinDailyio) November 18, 2022
Nevertheless, indications of bullish exhaustion are emerging.
Litecoin cost fractal shows 50% correction
Litecoin’s rally versus Bitcoin makes the LTC/BTC pai overvalued, based on its weekly relative strength index (RSI) studying.
Particularly, LTC/BTC’s weekly RSI, which measures the pair’s speed and alter of cost movements, surged above 70 on November. 22. An RSI studying above 70 is recognized as overbought, which many traditional analysts see as an indication of an impending bearish reversal.
In the past, Litecoin’s overbought RSI readings versus Bitcoin happen to be adopted by major cost corrections. For example, in April 2021, the LTC/BTC RSI’s climb above 70 met having a strong selloff reaction, eventually pushing the happy couple lower by 75% to .001716 BTC by June 2022.
Similarly, an overbought RSI in April 2019 brought to some 70% LTC/BTC cost correction by December 2019.
Exactly the same RSI fractal now shows Litecoin’s chance of having a 50% wipeout versus Bitcoin if along with LTC/BTC’s multi-year climbing down funnel pattern, as proven below.
TypicalLTC/BTC turns overbought after striking the channel’s upper trendline, which follows track of a correction toward the low trendline.
Consequently, the happy couple risks a drop to or below .001797 BTC by December 2022 when the fractal repeats, lower greater than 50% in the current cost levels.
On the other hand, a decisive breakout over the upper trendline might have LTC/BTC test its 200-week exponential moving average (200-week EMA nowhere wave) at .005319 BTC, up 30% from current cost levels, because the next upside target.
LTC/USD pair “bear flag”
Litecoin eyes an identical cost crash in comparison to the U.S. dollar because it paints a bear flag pattern around the weekly charts.
Related: Cathie Wood’s ARK Invest adds more Bitcoin exposure as GBTC, Coinbase stock hit new lows
Bear flags are bearish continuation patterns that appear once the cost consolidates greater in the parallel, climbing funnel range following a strong move lower (known as flagpole). They resolve following the cost breaks underneath the lower trendline and falls up to the flagpole’s height.
LTC continues to be buying and selling within the bear flag range, eyeing a failure below its lower trendline support close to $55. The bear flag downside target is about $32.40 whether it breaks decisively underneath the stated support.
Quite simply, a 50% decline by December 2022.
This short article doesn’t contain investment recommendations or recommendations. Every investment and buying and selling move involves risk, and readers should conduct their very own research when making the decision.
