Litecoin – one of the leading digital currencies – has been trading in a downward triangle for some time now, and it is ready to test the bottom, probably gearing up for a considerable breakout pretty soon.
Technical Indicators Signals
The long-term 200 simple moving average is above the 100 simple moving average to indicate that the path of least resistance is currently on a downward trend. In other words, chances are, instead of holding, the support level is likely to break.
The 200 simple moving average is also in alignment with the top of the triangle to increase its strength and make it stronger. If the support level declines further, it could result in a drop of the same magnitude in which it was formed, which skyrocketed from $131 to $161.
The Relative Strength Index
The Relative Strength Index seems to have reached the lowest point and it looks prepared to turn higher, possibly attracting investors back to the market. Also, stochastic is gradually moving up from the oversold levels to indicate a return in the momentum of purchase.
The Factors of the Market
Litecoin has been slacking behind some of its digital currency peers, and the digital currency does not have some positive developments to make it stand out. The founder of Litecoin – Charlie Lee has been on the social media talking about some positive updates about the coin, but a lot of investors are taking his tweets with a grain of salt since he has liquidated his Litecoin holdings.
Meanwhile, the USD has gained so much support by the fundamentals on the hopes of stronger rate hikes. Although, some legislators have shown concerns regarding the sluggishness in the crypto market and lukewarm wage growth. The minutes of the FOMC is up for publication and Fed rhetoric could still shape the value of the dollar.