Litecoin has formed higher lows and higher highs to trade inside an ascending channel visible on the 4-hour chart. Price is currently testing the resistance but might be due for a correction to support before resuming the climb.
Applying the Fibonacci retracement tool on the latest swing low and high shows that the 38.2% level lines up with the mid-channel area of interest to add to its strength as support. If this area keeps losses at bay, the price could make its way back up to the swing high at $41.456 or the channel top closer to the $42.000 level.
The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. The 100 SMA is also near the bottom of the channel, which might be the line in the sand for a correction as it also sits below the 61.8% level around $35.500.
RSI is already indicating overbought conditions to signal that buyers are tired and that sellers could take over. Stochastic is also in the overbought zone and is looking ready to move south, so Litecoin price could follow suit.
Still, it’s worth noting that Litecoin is chalking up the most gains of over 10% in the past 24 hours while other coins are on slightly shakier footing. One of the factors that is being attributed for the climb is Litecoin’s sponsorship of UFC, which makes it the first cryptocurrency to be placed in the Octagon and therefore attract new eyeballs in the market.
At this rate, Litecoin could be poised to give Stellar a run for its money. Overtaking XLM to be the sixth-largest coin in terms of market cap could give Litecoin an additional bullish boost as traders rush to move their holdings to take advantage of this switch. Another factor that led to some Litecoin support was likely founder Charlie Lee’s retweet of:
— Litecoin.com (@LitecoinDotCom) January 5, 2019
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