Litecoin price needs to retrace before LTC can rally 56%
|- Litecoin price has been on a smooth uptrend since September 28, rising 33%.
- As LTC hovers around the $177.78 resistance level, the MRI flashed a sell signal, hinting at a correction.
- A retracement toward the $163.89 is likely before LTC can kick-start an uptrend to $232.94 and $258.67.
Litecoin price is having trouble around a resistance level and is hovering around it after nearly ten days of ascent. One indicator, however, is suggesting a sell-off is around the corner, adding credence to the short-term bearish outlook.
Investors need to understand that this correction is necessary for LTC buyers to recuperate and kick-start a new uptrend.
Litecoin price experiences exhaustion
Litecoin price rose roughly 40% after creating a local bottom on September 28. This ascent faced almost no resistance as it ascended until it encountered the $177.78.
Now, LTC is likely to undergo a minor sell-off or enter a period of consolidation between $177.78 and $163.89 barriers. Supporting this outlook is the red ‘one’ sell signal from the Momentum Reversal Indicator (MRI). This technical formation forecasts a one-to-four candlestick correction. While it is unsure if Litecoin price is going to retest the lower end of this range, investors can expect a reaction off the $170.61 level.
The buyers can make a comeback here since it served as a stopping point before the second leg of the uptrend.
In this case, Litecoin price will head straight to the $189.75 resistance level and collect the buy stop liquidity resting above it. Flipping this hurdle into a platform will allow LTC bulls to continue this ascent to $232.94, constituting a 36% ascent from $170.61.
While some investors might decide to book profits here, there is a chance for Litecoin price to continue this ascent and tag the 50% Fibonacci retracement level at $258.67.
LTC/USDT 1-day chart
While things are looking good for Litecoin price from a short-to-mid-term perspective, a breakdown of the $163.89 support floor will indicate that the buyers expect a greater discount.
In such a case, LTC might wander toward the $148.41 demand barrier. A breakdown of this barrier will invalidate the bullish thesis and could trigger a correction to $139.80.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.