Litecoin markets rallied a bit on Wednesday to bounce from the $100 level. The $100 level is an area that would of course attract a lot of attention, so it makes sense that we have bounced for the day. Furthermore, the market has reacted to other markets, which have seen a little bit of a countertrend trade for the day. After all, the US dollar has been a bit overdone recently, so the dollar had to lose some strength.
The size of the candlestick is somewhat impressive when you compare it to the last couple of weeks, but I do not think it is going to change the overall attitude for any significant amount of time. We have the 50-day EMA sitting at the $125 level and drifting lower. The 50-day EMA will more than likely offer a little bit of technical resistance as it has multiple times in the past.
Litecoin will also have to look towards Bitcoin, because as Bitcoin goes, so do the rest of the crypto markets. In other words, when you move out on the risk spectrum with an asset such as Litecoin, you need to have an overall “risk-on” attitude around the world.
If we were to break down below the $100 level, then it is possible that we could go looking towards the $75 level, possibly even down to the $50 level. This would obviously be a major breakdown, but this would also just be a continuation of what we have been seeing. On the other hand, if we were to turn around and break above the $125 level, the market could then go looking towards the $150 level above, where the 200-day EMA currently resides. If we were to break above there, then it is likely that it would be a major trend change, but I think you would see that trend change in Bitcoin first.
Litecoin is a personal favorite of mine as far as the use case is concerned, but at the end of the day, it is considered to be a minor coin, so it needs the rest of the world to pick it up. I do think it is probably only a matter of time before we see a bigger move.
