After weeks of sideways trading, Litecoin finally broke away from its resistance level, leading to a wave of buying demand among investors. Digital silver versus Bitcoin’s gold is currently targeting a price of $70 after the bullish breakout. However, there is a growing concern about a decline at the upcoming resistance level as the LTC price could soon lose momentum.
Sellers liquidated $1 million worth of short positions
On a day when the cryptocurrency market showed bullish trends, Litecoin was not left behind. The altcoin saw a surge in buying interest, pushing the price past its weekly resistance barriers. Coinglass data shows a notable increase in the number of short liquidations, totaling $1 million, indicating a growing tendency among traders to place bullish bets on the future price movement of Litecoin.
Last week, Litecoin (LTC) whales found an opportunity to buy the $60 dip, although they have taken a more cautious approach ahead of the upcoming Federal Reserve meeting. Data from the blockchain shows that these large holders, who own between 10,000 and 1 million LTC, were the main reason for the asset’s recent price recovery.
Last week, whales collected another 510,000 LTC, increasing their holdings from 38.94 million to 39.45 million LTC. However, since that buying phase, they have maintained a more neutral position, keeping their Litecoin balance relatively stable.
While the price of Litecoin is rising, its volatility is trending downward. A decrease in volatility usually indicates a more stable asset, which can be attractive to long-term investors. Volatility has fallen from a high of 53.4% to 35.9% within two days.
The reduced volatility could indicate that the market is reaching a consensus on its value, reducing the chance of wild price swings. If institutional money flows into Litecoin, it could provide a more solid foundation for emerging trends.
What’s next for LTC pricing?
Litecoin broke through its moving averages, indicating bullish momentum. Despite some selling pressure near the EMA200 trendline, the bulls have managed to maintain control. At the time of writing, the LTC price is trading at $67.2, showing an upside of over 4.2%.
Bulls are currently gearing up for a potential rally above $70. If they succeed, LTC’s price could target a bullish trading range of $75 to $83. In the short term, the main support level to watch is the 20-day EMA of $64. A decline below this point would imply that the bears are gaining momentum, potentially pushing the price down to a strong support level at $57.
The RSI is approaching overbought territory, which is a signal that the current bullish momentum could weaken in the future. This could tip the balance in favor of sellers, especially near resistance points. Should the bulls lose momentum, an immediate downturn is likely and the RSI could shift its direction back to the neutral zone.