• Litecoin’s recent rejection from highs close to $250 leads to a break down as far as $180.
  • Recovery seems a farfetched idea, particularly with the weak support levels.
  • The MACD adds weight to the bearish narrative as losses linger towards $150.
  • Holding above $180 could see LTC abandon the bearish narrative and resume the uptrend.

Litecoin recently abandoned the journey to all-time highs following a barrier slightly under $250. The correction has proved difficult to stop, with Litecoin losing various tentative support levels like $220 and $200. Meanwhile, the altcoin is testing support at $180 while declines toward $150 beckon.

Litecoin engages strong reverse gears as technical levels weaken

The 4-hour chart illustrates a massively bearish Moving Average Convergence Divergence (MAC). This technical indicator can identify positions to sell the top and where to make an entry.

A dive below the mean line signifies increasing selling pressure. Besides, a widening divergence between the MACD line (blue) and the signal line confirms the bearish outlook. In other words, LTC is likely to continue with the breakdown until formidable support is established.

LTC/USD 4-hour chart

The least resistance path is downwards, particularly with the price trading below the 50 Simple Moving Average (SMA) on the 4-hour chart. Support at $180 is key to resuming the uptrend. However, if lost, Litecoin may freefall toward $150.

The IOMAP by IntoTheBlock brings to light the absence of vital support areas under LTC. This means that if selling pressure rises, Litecoin could dive further down. Meanwhile, the model brings our attention to the region running from $173 to $179. Here, nearly 35,600 addresses had previously bought around 807,000 LTC.

On the upside, Litecoin is dealing with immense resistance between $201.6 and $207. Here, roughly 72,900 addresses had previously purchased approximately 3 million LTC. Trading above this area will not be easy; hence recovery is not expected to come into play immediately.

Litecoin IOMAP chart

Litecoin IOMAP chart

Looking at the other side of the picture

If support at $180 remains intact, Litecoin will invalidate the bearish outlook and favor a recovery toward $180. Also, reclaiming the ground above the 50 SMA and $200 will call for more buy orders, perhaps even create enough volume to break the seller congestion within the IOMAP resistance between $201.6 and $207.

(Excerpt) Read more Here | 2021-02-22 23:00:05
Image credit: source

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