20 May 2024
Litecoin (LTC), the cryptocurrency often dubbed “silver to Bitcoin’s gold,” has left investors scratching their heads this week. After a brief surge, LTC finds itself stuck in a price tug-of-war, with analysts divided on whether it will climb to $90 or fall back to its support level near $80.
Mixed Signals Cloud Litecoin’s Future
Last week’s price action for LTC was a rollercoaster ride – not the kind that sends investors screaming with joy, but a slow, rickety climb followed by a disappointing stall. Despite breaking the $80 barrier on May 15th, LTC’s momentum fizzled out, leaving it hovering around $83.81 at press time.
Popular crypto analyst, CRYPTOWZRD, isn’t mincing words. Their recent tweet paints a picture of indecision, with LTC trapped in a price range between $80 and $94. A breakout, either bullish or bearish, seems imminent, but the direction remains a mystery.
LTC Daily Technical Outlook:$LTC closed indecisively today and it is trading in the middle of a Daily range area. I will pay more attention to the intraday chart development tomorrow to get a quick scalp pic.twitter.com/T5hAFTndIu
— CRYPTOWZRD (@cryptoWZRD_) May 19, 2024
To decipher LTC’s next move, analysts are turning to on-chain metrics – the digital breadcrumbs left behind by cryptocurrency transactions. Here, too, the picture is far from clear.
Glassnode’s NVT ratio, a measure of undervaluation, is flashing red, suggesting a potential price dip. However, a low reserve risk metric hints at an upcoming surge in bullish sentiment. Whale activity, often a bullish indicator, remains high, and the MVRV ratio, which gauges profitability for long-term holders, has also taken an upward turn.
Litecoin: Technical Indicators Offer Tentative Hope
Meanwhile, technical indicators offer a glimmer of hope for LTC bulls. The Relative Strength Index (RSI) sits comfortably above the neutral mark, suggesting the coin isn’t overbought.
One damper on the party spirit comes from the Bollinger Bands, a volatility indicator. LTC’s current position within the bands suggests a period of low volatility, making a sudden price surge less likely.
This subdued volatility is significant because Bollinger Bands typically tighten when market prices consolidate, signaling a lack of strong directional movement. For LTC, this means that without an external catalyst to drive momentum, the likelihood of a dramatic price breakout is diminished.
Crucial Levels: The $80-$85 Tightrope Walk
For LTC to reach its holy grail of $90, it needs to conquer a crucial resistance level at $85. This hurdle could be particularly challenging due to potential liquidations that might occur at that price point.
On the downside, if LTC fails to hold its ground at the $80 support level, a price drop to $78 could be on the cards.
Featured image from Pixabay, chart from TradingView