Litecoin’s price has fallen by 2% over the past 24 hours to $95.27. In the past few days, Litecoin met resistance at the 100-day EMA and was unable to overcome it, causing the market to roll over. Despite the recent price drop, LTC has had a promising week after a 6.25% price increase in anticipation of the Litecoin block halving.
Expected on August 5, the Litecoin block halving will see the mining reward slash in half from 25 to 12.5 LTC per block. This will effectively reduce the influx of coins entering the market and thus reduce inflation. Typically, that would encourage buying. However, many analysts believe that the block halving has already been priced in, and that we will not see too much of a pump after the halving. Nevertheless, over the long term, this should, in theory, help Litecoin as supply and demand are brought back to equilibrium.
Looking at the LTC/USD 1-day chart:
- Since our previous Litecoin analysis, LTC managed to break above the resistance at $97.18 but failed to break above $100 due to the resistance provided by the 100-day EMA. Litecoin’s price fell from this level and has formed a symmetrical triangle consolidation pattern.
- From above: The nearest level of resistance lies at the upper boundary of the triangle which is closely followed by more resistance at $100 provided by the 100-day EMA. If the bulls can break above this congestion, we can expect higher resistance at $110, $119, and $125. Above $125, further resistance lies at $136, $140, and $145.
- From below: The nearest level of support lies at the lower boundary of the pattern which is closely followed by support at $90. Beneath $90, the next levels of support lie at the 200-day EMA (around $88), $84.77 (.786 Fib retracement), and $77.45 (.886 Fib retracement).
- The trading volume has remained very low, which is quite surprising considering that the halving is 2 days away.
- The RSI managed to break above 50 but has since dropped back toward it as the market remains indecisive. The Stochastic RSI is leaning in the bears’ favor as it remains in overbought territory as we await a bearish crossover.
Looking at the LTC/BTC 1-day chart:
- The resistance at 0.0098 BTC was too strong, causing the LTC/BTC market to roll over. Trading against Bitcoin, Litecoin is now worth 0.0088 BTC and trending downward.
- From above: The nearest level of strong resistance lies at 0.0098 BTC followed by more resistance at 0.01 BTC. Above this, higher resistance is found at 0.0106 BTC, 0.0111 BTC, and 0.0113 BTC (also containing the 100-day EMA).
- From below: The nearest level of support lies at 0.008244 BTC which is provided by the .886 Fibonacci retracement. This level also supported the market during July. If the sellers push the price beneath it, further support lies at 0.00761 BTC, 0.007 BTC, and 0.006268 BTC.
- The trading volume has increased slightly during this latest round of selling.
- The RSI has plummeted back to beneath 50 as the sellers have regained control of the market.