At this point, I am still bearish, but I also recognize that we are in an area where we could see short-term recovery in Litecoin.
Litecoin fell a bit on Monday to pierce the $100 level. However, we have recovered a bit to form a bit of a hammer, so it is like likely that we will continue to bounce around in this area. That being said, if you remember, I had mentioned a couple of weeks ago that we kept making lower highs, and that does suggest that we could very well break down through all of the support given enough time.
Breaking down below the $95 level would open up quite a bit of negativity, and I think at that point it would more than likely go looking to the $75 level. After that, the market could go looking to get down to the $50 level. Obviously, that would be a very negative turn of events, and it would probably have something to do with the market going into “crypto winter.” In other words, crypto markets overall would continue to do very little, or perhaps even fall. We have seen this a couple of times in the past, and it certainly looks as if we are threatening to do that currently. In that scenario, smaller coins such as Litecoin would almost certainly get crushed.
On the upside, if we were to break above the $105 level, then we could make a move toward the 50-day EMA. The 50-day EMA currently sits just below the $114 level, and it is very likely that we would see a little bit of a pullback. Breaking above there would open up the possibility of a bigger move, and in that area, I would anticipate a move to the $120 level. In that scenario, we would see crypto, in general, take off to the upside, so obviously bigger coins would lead the way as per usual. Litecoin will not be able to take off to the upside unless something specific to Litecoin itself happens without others leading the way. That being said, we are most certainly in an area where there has been a lot of support in the past, so one would have to think that at the very least we might see some stabilization in this general vicinity. At this point, I am still bearish, but I also recognize that we are in an area where we could see short-term recovery in Litecoin.