Litecoin's Potential for a 25% Price Increase
Discover Litecoin's potential for a 25% price increase with a double bottom pattern and bullish divergence, while monitoring key support levels.
Litecoin ( LTC) has faced a 50% decrease from its yearly high in July, accompanied by a breakdown from a long-term ascending support trendline.
The current LTC price hovers around the $63 horizontal support area, where it has formed a double bottom ease from its yearly high in July, accompanied by a breakdown from a long-term ascending pattern.
Chart by TradingView
However, the potential for a 25% increase in LTC's price depends on specific factors. A weekly close below the $63 horizontal support area would invalidate the double bottom pattern and could lead to a significant drop.
In the weekly timeframe, LTC's decline from its July high to a low of $56 in August marked a 50% decrease within 42 days. This descent also coincided with a breakdown from a long-term ascending support trendline in place since June 2022.
Despite this bearish scenario, the daily chart offers a more optimistic outlook. Here are the key reasons:
Double Bottom Pattern: LTC's price has formed a Double Bottom pattern, which is typically considered a bullish signal that often leads to breakouts.
Bullish Divergence: This Double Bottom pattern is complemented by bullish divergence in the Relative Strength Index (RSI). Bullish divergence occurs when a price decrease is accompanied by a momentum increase, often indicating a significant shift in the trend.
If the current upward momentum continues, LTC's price could reach the previous ascending support line, located at approximately $80, representing a 22% increase from the current price.
However, it's essential to note that a close below the $63 horizontal support area would invalidate the double-bottom pattern. In such a scenario, LTC could potentially experience a 22% drop to the $50 support area.
Looking Ahead: Litecoin's price will depend on whether it can maintain the bullish momentum suggested by the double bottom pattern and RSI divergence or if it faces further bearish pressure leading to a breakdown below key support levels.
