Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Litecoin fills a chart inefficiency and a pullback was expected in an area of interest
- Momentum continued to favor the bulls and demand could fuel further price gains.
Litecoin [LTC] it has performed impressively on the price charts in recent weeks. The break beyond the highs of the range at the end of November was significant, as this range has been in play since May.
With Litecoin halving in August 2023 and rising hash rates in recent months, it was possible that LTC could well break above the $100 mark in the coming months.
Read litecoin [LTC] price prediction 2023-24
The scenario highlighted in this article is in the case of continued bullish momentum. A drop below the $85 and $80.6 levels could trigger a deeper pullback towards $76.3. However, bear market rallies can be extremely aggressive and traders should remain cautious.
An aggressive bullish move could follow in the coming days and traders can watch for a drop to $80 to buy.
Litecoin had a strongly bullish outlook. It broke above the range highs (yellow) at $73.3 on Nov. 23. Selling pressure in December caused LTC to revise the order block bullish at $60, which was also close to the mid-range value at $60.3.
Despite the pullback from $80 in December, the higher term market structure remained bullish as $59.25 was not broken. This saw follow through from the bulls over the past two weeks as they retook the range highs and pushed further.
Is your wallet green? check the Litecoin [LTC] earnings calculator
On the daily time frame, a fair value gap was seen from $84.75 to $91.75, demarcated in white. This inefficiency has been filled, but a rollback may not occur. Instead, Litecoin is likely to push the bearish order block higher at the $99-$106 area, marked in red.
The RSI was in overbought territory, but momentum remained strongly bullish as the daily and 12-hour time frames have yet to notice a divergence. Similarly, OBV has also rallied north rapidly over the past two weeks, reinforcing the idea of strong buying pressure.
Therefore, the dips are to buy. A pullback to the $80 (cyan) area can be considered. It was a consolidation zone on lower time frames and could see a quick bullish reaction. The invalidation of this idea is a daily session close below $79.4, while profit taking would be in the bearish order block above the psychological $100 level.
Rising MVRV Ratio Could Give Buyers Doubts
The Santiment data showed that the funding rate was positive. This highlighted the bullish sentiment in the market, however the MVRV ratio (30 days) was also in positive territory. This meant that, like the late November rally, holders can look to take profit over the next week or two.
This could introduce bearish pressure and may force Litecoin prices down. If the idle circulation metric also sees a sharp increase, it could underscore the idea of profit-taking by holders in recent months.