Litecoin (LTC) has just formed a golden cross on its daily charts, igniting fresh interest in the cryptocurrency community, given Bitcoin's rise to new all-time highs.
Bitcoin approached the historic $100,000 level after several days of rising, reaching a record $97,931 on Thursday.
A golden cross is formed when a short-term moving average crosses above a long-term moving average. In the case of Litecoin, the 50-day moving average has crossed above the 200-day moving average, confirming a golden cross that suggests an upward price movement may be on the way.
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The last time Litecoin experienced a golden cross was in February 2024. This was followed by a substantial price increase, with LTC's price reaching yearly highs of $112. This reinforces traders' optimism.
Potential scenarios
Litecoin's golden cross might result in a breakout, which could see Litecoin breaking through key resistance levels and potentially reaching new highs. In this scenario, Litecoin might target new yearly highs above $112. if this is achieved, LTC might aim for the $300 mark.
Another possibility is a short-term price rally. While the golden cross is a strong bullish signal, external factors such as market conditions and broader economic trends could influence the extent of the price increase.
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Litecoin surged from lows of $81 to $92 in today's trading session; at the time of writing, LTC was up 4% in the last 24 hours to $90 and up 11% weekly.
Despite the positive connotations of a golden cross, there is always the risk of a market correction. If the broader cryptocurrency market suffers a setback or if there is a shift in investor sentiment, Litecoin could see a pullback. In this scenario, Litecoin might test support near the daily moving averages 50 and 200 at $71.06 and $72.94, respectively.
In some cases, a golden cross might not lead to an immediate price rally. Litecoin could enter a period of consolidation, where the price moves sideways as the market digests the new technical pattern. This scenario would still be positive in the long term, as it sets the stage for future growth.
