Home CryptoMarket Litecoin hits fresh 2022 high versus Bitcoin — But will LTC price ‘halve’ before the halving?

Litecoin hits fresh 2022 high versus Bitcoin — But will LTC price ‘halve’ before the halving?

by CryptoFan
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Litecoin (LTC) has emerged as one of the few winners in the ongoing crypto market meltdown that began with the collapse of the FTX exchange.

LTC Price Surpasses BTC, ETH

The altcoin, which was born in 2011, rose about 16% month-to-date (MTD), reaching $62.75 on Nov. 22, while its biggest rival Bitcoin (BTC) fell about 25% and 30% respectively. and surpassed Ether (ETH). , in the same period.

LTC/USD daily chart.Source: Trading View

Additionally, the price of LTC/BTC also rose to new highs, rising 50% in November and hitting an annual high of 0.003970 BTC on November 22nd.

As reported by Cointelegraph, Litecoin diverged from the broader crypto market downtrend earlier this month with its scheduled halving in August 2023. LTC also endorsement Being a “digital commodity” like Bitcoin is none other than Michael Thaler.

Nonetheless, signs of bullish depletion are emerging.

Litecoin Price Fractal Suggests 50% Correction

The weekly Relative Strength Index (RSI) shows the LTC/BTC pair is overvalued due to Litecoin’s rise against Bitcoin.

Notably, LTC/BTC’s weekly RSI, which measures changes in the pair’s velocity and price movement, surged above 70 on Nov 22. An RSI reading above 70 is considered overbought. , which many traditional analysts see as a sign of an imminent bearish reversal.

Historically, Litecoin’s overbought RSI value against Bitcoin has been followed by a significant price correction. For example, in April 2021, when the LTC/BTC RSI crossed 70, there was a strong selling reaction and the pair eventually dropped 75% to 0.001716 BTC by June 2022.

Similarly, the overbought RSI in April 2019 caused the LTC/BTC price to correct by 70% by December 2019.

The same RSI fractal, combined with LTC/BTC’s multi-year descending channel pattern, suggests that Litecoin may experience a 50% wipeout against Bitcoin, as shown below.

LTC/BTC weekly price chart.Source: Trading View

Typically, LTC/BTC becomes overbought after reaching the upper trendline of the channel and then corrects towards the lower trendline.

As a result, if the fractal repeats, the pair risks falling below 0.001797 BTC by December 2022, down more than 50% from current price levels.

Conversely, the definitive breakout above the upper trendline will be LTC/BTC up 30% from the current price level at 0.005319 BTC as the next upside target at 0.005319 BTC with the 200-week exponential moving average (200-week EMA, blue wave).

LTC/USD Pair “Bear Flag”

We expect a similar price crash against the US dollar as Litecoin traces a bear flag pattern on the weekly chart.

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A bearish flag is a bearish continuation pattern that appears when price rises within a parallel rising channel range after a strong decline (called a flagpole). It resolves after the price breaks below the lower trendline and moves down by the height of the flagpole.

LTC/USD weekly price chart.Source: Trading View

LTC is trading within the bearish flag and will be watching the trendline support around $55. The bearish flag’s target for the downside is around $32.40 in the event of a significant break below the aforementioned support, i.e. a 50% drop by December 2022.

This article does not contain investment advice or recommendations. All investment and trading moves involve risk and readers should conduct their own research when making decisions.