Litecoin (LTC) price has been falling since it broke above the $100 horizontal resistance area at the beginning of July. The LTC price has reached a long-term rising support line that has been in effect for over a year. Its breach could determine the future trend of the token.
Critical Metric in Litecoin!
According to analysts, the weekly timeframe technical analysis indicates a bearish trend due to both price action and indicator readings. Additionally, LTC shows a downtrend in price movement as it failed to sustain the July breakout. The price briefly exceeded the $100 target but quickly dropped below it.
This confirmed the $100 area as resistance and initiated an ongoing downward movement. The LTC price is now trading on a rising support line that has been in place for 427 days. As the line has been in place for a long time, a break or bounce of Litecoin could determine the future trend.
A break of the line could trigger a 20% drop to the $64 support area, while a different bounce could initiate a 33% increase towards the $100 resistance. Additionally, the weekly Relative Strength Index (RSI) could strengthen the idea of an ongoing downtrend. After showing a downtrend following the previous divergence, the RSI recently dropped below 50.
Effects of LTC Halving!
This metric occurs when a decrease in momentum accompanies an increase in price. It can also highlight the potential for a downtrend. Litecoin experienced its third halving event on August 2nd, reducing LTC block rewards from 15 to 6.25. Despite the deflationary nature of the halving, LTC’s price dropped in the week following the event. However, there may be potential for a recovery in LTC’s price. Since the beginning of February, Litecoin has been trading in a rising parallel channel. The token’s price dipped slightly below the support line of the channel.
However, since it did not close below it decisively, the possibility of a reversal and rebound remains valid. Additionally, the alignment of the channel’s support line with the long-term rising support line could further increase the significance of the channel. If this scenario unfolds, a significant LTC price recovery from the support line of the channel can be expected, potentially pulling the price towards the $100 resistance area.
