Litecoin [LTC] has recently broken out of a multi-year symmetrical triangle pattern, marking the end of a long consolidation phase. At the time of writing, LTC is trading at $114.5, having slightly corrected over 1% in the past 24 hours.
This breakout has drawn significant attention from traders, raising expectations for a sustained bullish rebound; whether Litecoin can maintain its upward momentum and reach the anticipated $400 mark remains to be seen.
Litecoin: Strong rebound ahead.
This breakout is driven by strong momentum, laying the foundation for a bullish rebound, with key resistance levels at $136 and $232.
Litecoin's price action indicates a good chance to test these levels, which will be a key indicator of its trend.
Furthermore, the breakout from the symmetrical triangle highlights new buying interest, further enhancing the likelihood of continued upward movement; overcoming these resistance points is crucial for Litecoin to reach $400.
Technical indicators paint an optimistic picture for Litecoin's potential price increase. At the time of writing, the Relative Strength Index (RSI) is at 61, indicating strong bullish momentum while still remaining below overbought levels.
Moreover, the 9-day and 21-day moving averages have recently formed a bullish crossover, confirming a trend reversal.
These indicators suggest that as long as market conditions remain favorable, Litecoin has the momentum to sustain its upward trend. However, traders should watch for any signs of overextension as prices approach resistance levels.
On-chain indicators show strong network activity.
On-chain indicators provide a mixed outlook for Litecoin's rally. The 'in-the-money' indicator shows an increase of 1.15%, indicating a slight rise in the proportion of holders taking profits, boosting investor confidence.
The concentration indicator shows an increase of 0.13%, reflecting growing interest from large holders.
However, the net network growth lags by only 0.37%, categorized as bearish, and large transactions have decreased by 3.22%, suggesting that institutional participants may be hesitant. Therefore, sustained network activity and large transactions are crucial for driving further price action.
LTC MVRV ratio and price-DAA divergence raise caution.
Litecoin's MVRV ratio is 25.41%, indicating it is fairly valued, with room for further upside and no signs of overbought risk.
However, the price-DAA (Daily Active Addresses) divergence at -71.57% raises some concerns as it reflects a lag in address activity relative to price increases.
If network activity fails to keep pace with the recent price surge, this divergence could signal potential volatility. Therefore, investors should remain cautious when assessing short-term risks.
Can Litecoin reach $400?
Litecoin shows strong technical signals indicating its potential for continued growth. However, mixed on-chain indicators and resistance levels at $136 and $232 may challenge its upward momentum.
With sustained momentum and increasing network activity, Litecoin is expected to reach the $400 target. Therefore, Litecoin's success will depend on how it overcomes these key obstacles in the coming weeks.
In summary, Litecoin's breakout from a multi-year triangle pattern highlights bullish momentum towards the $136 and $232 resistance levels; MVRV ratio and institutional activity suggest a cautiously optimistic outlook for further growth.