However, LTC/USD is vulnerable to a market decline as it is forming a traditional bearish reversal pattern.
Amid a broader cryptocurrency market rise that analysts attribute to inflation fears, Litecoin registered daily gains of about 20% on November 9, the best levels for LTC/USD since May 2021.
In three days, the price of the 14th-largest digital asset increased by a little over 25%, bringing Coinbase’s price up to close to $250. The value of all cryptocurrencies has since reached its greatest point, approaching $3 trillion.
Impact of Bitcoin
According to statistics from Cointelegraph Markets Pro, the current price increase in Litecoin was inspired by comparable upward moves in other leading digital assets.
As an illustration, Bitcoin, the most valuable cryptocurrency in the world, surged to a new record high Tuesday above $68,500. Ether experienced a record high above $4,840 as well.
However, Litecoin was one of the top alternative cryptocurrencies (altcoins) to perform better than Bitcoin during the past 24 hours. Data from Messari revealed that the heavily traded LTC/BTC instrument increased by over 14%, pointing to increased capital flow from the Bitcoin to the Litecoin markets.
Based on a traditional bullish reversal pattern known as a falling wedge, the technical forecast for the pair indicated further gains were yet in store.
Falling wedges start wide at the top and begin to close as the price declines. When the price crosses over the upper trendline of the wedge, this signals a bullish confirmation. The breakout is often seen by analysts as a call for a rally toward the profit objective, which is located at a distance equal to the wedge’s maximum height.
The most recent rise in Litecoin’s price saw it break above the top trendline of its falling wedge, opening up the possibility of further increases.
Thus, the profit objective is around 0.006122 BTC. Litecoin’s chart, on the other hand, showed a bearish divergence between its growing prices and declining volumes over the past three weeks, indicating that the falling wedge breakout move may become weaker.
Inherent Risks, Bearish Litecoin Wedge
After bottoming out near $103 on July 20, the price of Litecoin has increased by more than 150% in terms of US dollars. The tremendous upward movement of the silver to Bitcoin’s gold cryptocurrency, however, has also sparked a bearish reversal view, suggesting that its rise is about to come to an end.
The pattern, known as a rising wedge, is the exact opposite of a falling wedge. It starts broader at the bottom but starts to narrow as the price increases. When the price crosses below the lower trendline and subsequently targets levels that are the same length as the wedge’s height, this is a bearish confirmation.
The wedge objective could change from between $117 and $21, depending on the point at which Litecoin begins its negative breakout.
On the other hand, a strong breakthrough above $250 would run the danger of invalidating the rising wedge pattern, sending LTC on its way to test $300 as its next price objective.
