• 29 May, 2024

Litecoin Shows Bullish Signs Despite Resistance, Short Sellers Alert

The recent positive trajectory of Litecoin (LTC) has made it a focal point in the virtual currency sector. The coin has shown a discernible trading range since mid-August, generating curiosity among dealers and investors alike. The asset’s substantial positive correlation with Bitcoin (BTC) indicates a lot of room for growth. Despite these circumstances, LTC has yet to overcome a sizable resistance zone in a longer timeframe.

4-hour price chart LTC/USDT, Source: TradingView

The 4-hour price chart for LTC against TetherUS (USDT) from TradingView reveals interesting dynamics from October start to October 25, 2023. The coin has seen fluctuations between approximately $57.50 and $72.50. As of late, a pronounced uptrend has taken the price to around $69.19. The trading volume mirrors this bullish activity, with a notable spike to 30.197K, pointing to heightened trading interest.

The chart’s On-Balance Volume (OBV) line paints a positive picture, showcasing a rising trend indicating that buying is outstripping selling volume. Additionally, the Relative Strength Index (RSI), a crucial momentum oscillator, provides valuable insights. It hovers just above the 70 mark, hinting at possible overbought conditions. However, this alone should not serve as a trading call, as it’s vital to consider various indicators and market factors.

1-day price chart LTC/USD Source: Coinalyze

In Coinalyze’s daily LTC/USD price chart, a more detailed examination of LTC’s price action reveals a decline from $110 to a low of approximately $60, followed by a rebound to $69.39. The open interest and Cumulative Volume Delta (CVD) charts indicate that genuine interest has remained relatively stable, with minor fluctuations in the price. However, the negative CVD value of -8.121 million highlights the prevailing dominance of selling volume in the market.

Hyblock data indicated a positive Cumulative Liq Levels Delta, signifying increased buying activity despite a  pullback from $72, which led to the liquidation of long positions, causing a decline in this delta. The liquidation levels chart highlights the potential for millions of dollars in short positions to be liquidated in the $70-$72.15 price range, potentially paving the way for another upward push toward the $73 mark before a reversal may occur.

Litecoin’s recent price action provokes a mixed reaction among investors. On one hand, the uptrend and substantial buying volume provide a bullish outlook. Conversely, the potential overbought conditions and the significant selling pressure revealed by the CVD necessitate caution. Consequently, traders, especially short sellers, should remain vigilant, as the market could offer profitable opportunities soon.

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