Disclaimer: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.
Recent market-wide gains have helped Litecoin [LTC] the buyers are recovering the $53 level in the last 24 hours. As a result, the altcoin quickly jumped above the EMA ribbons to project strong buying momentum.
Additionally, recent bullish engulfing candlesticks have reflected a solid increase in buying pressure. Sustained rejection of higher prices in the $55 area could inflict a short-term pullback ahead of the altcoin’s likely revival.
At press time, Litecoin was trading at $55.355, up 7.65% in 24 hours.
4 hour LTC chart
The altcoin’s resurgence in buying has seen it test higher highs over the past couple of weeks. As the bears secured the $55 level, LTC saw an ascending channel move in the previous five days.
After a brief phase of compression near the point of control (POC, red), the crypto finally experienced a volatile breakout in favor of the buyers. LTC showed a strong rejection of higher prices around the $55.8 area.
With the EMA ribbons finally looking north, the bulls were aiming to steer the long-term trend. A bullish cross with the 200 EMA (green) can position the alt for a sustained long-term uptrend.
An immediate rebound from the $55 mark may help buyers retest the lower trendline of the uptrend channel. Any close below the channel could expose the alt to a short-term pullback. In this case, LTC could head towards the $52 area or near its POC before the bulls step in to cause the buying pressure.
The Relative Strength Index (RSI) finally saw a reliable close beyond the overbought zone. A likely reversal from this level could ease the buying pressure in the coming sessions.
Also, the volume oscillator marked lower peaks, unlike the higher peaks in the price action. This revealed a bearish divergence. Interestingly, the Awesome Oscillator reached its monthly high and showed a strong buying advantage while reaching its reversal zone.
Given the confluence of resistance and near-term indicators, LTC could likely see a hurdle in the $55 area. A drop below the pattern would trigger a short circuit signal with the targets mentioned above.
However, LTC shares a 69% 30-day correlation with the king coin. A close eye on Bitcoin’s movement would be imperative to making a profitable move.