After weeks of sideways trading, Litecoin finally broke free from its resistance level, sparking a wave of buying demand among investors. The digital silver to Bitcoin’s gold is currently aiming for a $70 price point following the bullish breakout. However, there’s a growing concern about a plunge from the upcoming resistance level as the LTC price might soon lose momentum.
Sellers Liquidated $1 Million Worth Of Short Positions
In a day where the cryptocurrency market displayed bullish tendencies, Litecoin didn’t lag behind. The altcoin experienced a surge in buying interest, sending the price past its weekly resistance barriers. Coinglass data indicates a notable uptick in short liquidations, totalling $1 million, which points to a growing inclination among traders to make bullish bets on Litecoin’s future price trend.
Last week, Litecoin (LTC) whales found the opportunity to buy the dip of $60, although they’ve adopted a more cautious approach in anticipation of the forthcoming Federal Reserve meeting. Data from the blockchain reveals that these large holders, who possess between 10,000 and 1 million LTC, were the main reason for the asset’s recent price recovery.
Last week, whales accumulated an additional 510,000 LTC, boosting their holdings from 38.94 million to 39.45 million LTC. However, since that buying phase, they’ve maintained a more neutral position, keeping their Litecoin balances relatively stable.
While the price of Litecoin is surging, its volatility is showing a downward trend. A decline in volatility usually suggests a more stable asset, which can be attractive to long-term investors. The volatility has dropped from a high of 53.4% to 35.9% within two days.
The reduced volatility could indicate that the market is reaching a consensus about its value, bringing less chances of wild price swings. If institutional money flows into Litecoin, it could provide a more solid foundation for upcoming trends.
What’s Next For LTC Price?
Litecoin broke through its moving averages, signaling bullish momentum. Despite some selling pressure near the EMA200 trend line, the bulls have managed to maintain control. As of writing, LTC price is trading at $67.2, showing an uptick of over 4.2%.
Bulls are currently gearing up for a potential rally above the $70 mark. If they succeed, the price of LTC could target a bullish trading range of $75 to $83. In the short term, the key support level to watch is the 20-day EMA at $64. A drop below this point would imply that bears are gaining acceleration, possibly driving the price down to a strong support level at $57.
The RSI is approaching the overbought territory, signaling that the current bullish momentum could weaken ahead. This could tip the scales in favor of sellers, especially near resistance points. Should the bulls lose momentum, an immediate downturn is likely, and the RSI could shift its direction back toward the neutral zone.
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