Litecoin’s [LTC] recent uptrend has pushed the altcoin above the trendline resistance and into a potential breakout zone on the chart.
As of this writing, LTC is trading around $88, up more than 2% in the past 24 hours. The key question is: will buyers maintain momentum and target higher resistance levels, or are we about to experience a short-term setback?
LTC breaks above EMA, showing strong buying momentum
Litecoin has been in an ascending channel pattern for the past three months. Recently, the coin broke out of this pattern after experiencing a huge buying pressure. During this rally, the coin closed above key moving averages such as 20, 50, and 200-day EMA.
This week, the altcoin has made multiple attempts to break out of the major resistance range around $89 to $93.
If the bulls succeed in breaking above $93, LTC could rally to the next major resistance in the $100-104 zone. On the other hand, failure to break above this resistance could result in a pullback to the support around $76 or even lower to the $72 zone, in line with the recent EMA and the immediate trendline support (white dotted line).
The RSI confirmed that buying pressure had eased as it reversed from overbought levels and fell below the moving averages. The inability to cross the RSI-based moving averages can result in a rather slow move on the chart.
LTC derivatives data shows
The outlook for LTC is slightly more positive based on derivatives data. Trading volume surged 76.14% to $1.14 billion, indicating that more traders are participating as the price rises.
Open interest also increased slightly, suggesting that traders are preparing for a major move, either a breakout or a continuation of the current trend.
The long-short ratio is almost balanced at 0.9414, but on platforms like Binance and OKX, the long-short ratio is more in favor of bullish sentiment. Top traders are betting on rising prices.
It is also important to consider the overall market and Bitcoin’s movements in particular as they can greatly affect other altcoins like Litecoin. If Bitcoin continues to perform well, it could help Litecoin break through the $93 resistance level.
