Litecoin (LTC) is looking at a bullish breakout, having clocked a one-week high earlier today.
The world’s fifth largest cryptocurrency by market capitalization rose to $175 at 17:19 UTC – the highest level since March 14 – and was last seen changing hands at $173, as per CoinMarketCap.
The 26 percent rise from the March 18 low of $137 indicates the sell-off from the Feb. 20 high of $254 has ended.
However, trading volume has dropped by 17 percent since March 18, suggesting the gains might be short-lived. Further, the 24-hour trading volume of $0.5 billion, stands well below the three-month average daily trading volume of $0.94 billion.
Still, there are reasons to be optimistic as, unlike bitcoin, the cryptocurrency is trading well above its 200-day moving average (MA), according to GDAX data. Further, the price chart analysis indicates LTC has created a bull flag continuation pattern.
A daily close above $177 would confirm a bull flag breakout, signaling the rally from the Feb. 6 low of $104 has resumed and would allow a stronger rally as high $320 (pole height added to breakout price).
On the way up, LTC will likely face resistance at $214 (100-day moving average) and $252 (Feb. 20 high).
Note that the relative strength index (RSI) has already witnessed a bull flag breakout, so the price is likely to follow suit.
A bull flag breakout would revive the bull run and possibly yield a rally to $300-$320 in the longer term.
Repeated failure to beat the flag resistance could yield a pullback to $150, but a bullish-to-bearish trend change is likely only below the 200-day MA support of $141.
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Author Omkar Godbole