The Litecoin market rallied a bit during Monday’s trading session to initially break above the $125 level. However, the market returned much of the gain to show signs of exhaustion and hesitation as we returned to the 50-day EMA. The $120 level below continues to offer support, and if we were to break below this level, then it is possible that we could turn towards the $100 level in the longer term. We are on the precipice and will have to make a decision on bigger moves up or down.
Falling below the hammer in Friday’s session would of course be a very negative sign, which would not only clear the short-term support, but also clear the $120 level. At this point, a certain amount of psychology would likely kick in, driving this market down, possibly pushing it all the way to the $100 level. This would most likely be influenced from outside, with the Bitcoin market leading the way for the rest of crypto.
Alternatively, if the market were to break past last week’s highs, then Litecoin could reach $140 above, possibly even the 200-day EMA which currently sits at the $147.35 level. The 200-day EMA is of course an indicator that many people pay close attention to, and so breaking above that would be a very bullish sign. In reality, this would technically be the start of a new uptrend for almost any account, and so it makes sense that we would see the market going much higher at this point. However, you need to make sure that bitcoin does the same, because that gives us the general attitude of the crypto markets in general.
It’s very likely that you just have to wait for some type of impulsive breakout or meltdown and then just follow the progress. The market has been in a downtrend for quite some time, but you can also argue that the $100 level is psychologically and structurally important, and an area where we are trying to form some sort of longer-term bottom.