Analysis: Litecoin trading pattern is prerequisite for bullish movement

The near-term outlook of Litecoin (LTC/USD) appears favorable as the altcoin’s trading patterns indicate a bullish trend. These predictions are backed by bullish crossover on the Directional Movement Index (DMI), a northbound RSI, and growth in 24-hour trading volumes, CoinFi writes, citing data from crypto analyst firm AMB Crypto.

Bearishness if Litecoin doesn’t close above upper trendline  

To eliminate a bullish outcome, sellers should target a close below $166 and provoke a breakout in the opposite direction. Since October 4, the altcoin has been characterized by a series of higher lows and steady highs, around $180 at the time of publication. An ascending triangle setup was charted on this basis. As the coin tackles the upper trendline and pressure to sell drops, the pattern becomes a prerequisite for an upwards breakout.

LTC assumed to rebound from moving average line

Are you looking for fast-news, hot-tips and market analysis?

Sign-up for the Invezz newsletter, today.

It was assumed that Litecoin would rebound and peak again around $187. If it closes above this level, bulls can keep going to the next Fibonacci levels of 61.8% and 78.6%. If bulls can hike 24-hour trading volumes up, Litecoin might set up a full extension above $210.

New lows of around $170 can be expected if the altcoin closes below the level where $176 support and confluence of the 50-EMA meet. If bears cut under $166.24, it will lose its bullish thesis. The market would see support levels of $157 and $153 after a breakdown from the pattern.

Breakdown is out of the question

As per the DMI and RSI, concerns about a breakdown seem unwarranted. LTC was still trading above midline despite the slight downtick noted by RSI. Any imminent bearish positions will be dissuaded by the DMI’s bullish crossover. At the same time, an early breakout is not likely either.

New lows around $176 expected

Before Litecoin recovers to reach the upper trendline, a newer low around $176 can be expected. Investors willing to extend the ascending triangle will find it the perfect buy. They can set stop losses just below $170. Should a breakout occur, they can close their positions at Fibonacci Extension levels 61.8% or 78.6% after probing trading volumes over the past 24 hours.