Litecoin

Strong

Momentum

Resistance

<p>Once again, Litecoin has become an area of focus as the crypto nears a crucial technical resistance level that will dictate whether it moves on a fresh trend direction. For months, Litecoin has been consolidating inside a descending channel, but recently, the crypto has started signaling growing strength amid continued support from buyers at key levels.</p><p>While the breakout is yet to be confirmed, positive developments in terms of price structure, derivatives positioning, and increasing buying activity have shifted the market’s interest to the prospect of a breakout move.</p><h2 id="descending-channel-set-for-a-tough-test">Descending Channel Set for a Tough Test</h2><p>As per technical analysis provided by ZAYK Charts, Litecoin faces a critical test against the upper boundary of the well-established descending channel that has been constraining price moves upwards for many months. Sellers repeatedly defended resistance during the course of the correction and created lower highs and lows along the way.</p><p>In recent weeks, though, the market structure has improved. The buyers managed to defend the support level of the descending channel in June and since then formed a pattern of higher swing lows. Instead of making sharp retracements after rallies, Litecoin trades close to resistance, indicating increasing buying pressure.</p><p>This sort of price action is frequently indicative of improving market sentiment, although most technical analysts would consider a daily close above resistance to be necessary to confirm a breakout. Should that be seen, the measured move from the descending channel is estimated at around 31% upside. Chart projections do not guarantee anything about future performance but give technical targets based on the completed price action patterns.</p><h2 id="price-action-stays-positive">Price Action Stays Positive</h2><p>As of writing, <a class="thirstylink" href="https://med.etoro.com/B10215_A127826_TClick_Scb-LTC.aspx?TargetURL=https://www.etoro.com/markets/LTC" rel="noopener noreferrer nofollow">Litecoin</a> is currently priced at about $47.10, marking a 1.39% price gain in the current trading session. The session kicked off near the $46.40 level, where buyers formed a consolidation area, then slowly moved prices above the psychologically important level of $47.00.</p><p>The momentum continued to build throughout the session and allowed Litecoin to touch an intraday high near the $47.55 level. After some profit-taking took place, buyers still managed to hold on to the $47 mark, which allowed prices to move sideways between about $47.10 and $47.30, without much selling pressure.</p><p>A slow upward movement is perceived as better compared to a quick spike, as it could indicate real buying interest rather than speculation momentum.</p><p>However, there is one crucial element that is missing from the equation so far. Daily trading volume fell by about 12.8% to around $187.46 million, suggesting that there is not enough participation in the rally from the whole market yet.</p><h2 id="liquidations-point-to-a-healthy-market">Liquidations Point to a Healthy Market</h2><p>In addition to the price movement, Litecoin’s derivative market also shows some positive signs. The recent liquidation figures indicate that excess leverage has gradually been stripped away from the market after two major corrections.</p><p>The biggest surge of long liquidations was recorded at the end of January and beginning of February, where leveraged positions incurred losses of around $10.86 million. This led to a further decline of prices due to traders being squeezed out of their positions.</p><p>The other liquidation instance was observed in late May to early June, during which the price of Litecoin moved down from around $49 to about $42-$43 range. After the correction, the volume of liquidations began to normalize, implying that most of the speculative leverage had been stripped away.</p><p>The short-side liquidations have been relatively low during the same period, indicating that the bull traders had mostly covered themselves in the market’s forced changes.</p><p>Reduced liquidation activity makes the market a healthier one as the price changes will not be driven by excess leverage but market demand.</p><h2 id="breakout-confirmation-remains-the-critical-indicator">Breakout Confirmation Remains The Critical Indicator</h2><p>The Litecoin technical picture continues to show signs of improvement, with buyers defending important levels of support amid continued resistance from the long-term descending resistance. As the technicals continue to favor buyers, with reduced risks of leverage, the emphasis has been on confirmation of the breakout.</p><p>However, despite the positive technicals mentioned above, there has not yet been an outright daily close above the channel resistance. Until that happens, that will be the important resistance for the moment. If buyers succeed in breaking that level with conviction, it would signal a move towards more bullish levels for <a class="thirstylink" href="https://med.etoro.com/B10215_A127826_TClick_Scb-LTC.aspx?TargetURL=https://www.etoro.com/markets/LTC" rel="noopener noreferrer nofollow">Litecoin</a>.</p><p>This article was originally published as <a href="https://www.cryptobreaking.com/litecoin-breakout-setup-forming-on/?utm_source=rss&amp;utm_medium=syndication&amp;utm_campaign=article_footer" rel="noopener noreferrer nofollow">Litecoin Breakout Setup Forming on Strong Momentum Above Crucial Resistance</a> on <a href="https://www.cryptobreaking.com/?utm_source=rss&amp;utm_medium=syndication&amp;utm_campaign=article_footer" rel="noopener noreferrer nofollow">Crypto Breaking News</a> – your trusted source for crypto news, Bitcoin news, and blockchain updates.</p>

Litecoin Breakout Setup Forming on Strong Momentum Above Crucial Resistance

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