Although external market aspects will constantly influence the rate action of assets and the crypto market, dependence on the price trends could direct one towards a more profitable result, which seems to be the case with Litecoin at the moment.
Litecoin to drop further?
Analyzing rate patterns have actually come up with an intriguing observation. Litecoin has consistently undergone a suspiciously comparable pattern since it marked the ATH of $388 in Might.
To start with the altcoin has been in a constant downtrend wedge for over eight months now. What began as a simple correction continued to maintain the sag in 2022. Although there was an attempt at breaching the level, LTC stopped working to sustain.
Now that the wedge is getting narrower, it seems like Litecoin could take a turn for the worse. Although the important resistance for LTC is up above $142, its immediate resistance stands in line with the upper trend line at $123. (ref. Litecoin rate action and RSI pattern image)
Why $56 is a possibility
Taking the Relative Strength Index (RSI) into account, one can observe the pattern of the indicator’s motion in the bullish and bearish areas.
Considering that June, the RSI was first stuck in the bearish zone for a good 69 days up until August 2021. Following that, for a period of 105 days, the coin lingered mainly in the bullish location.
This was again followed by another 70 days of the sign being stuck under the neutral line in between December and February.
Litecoin cost action and RSI pattern|Source: TradingView– AMBCrypto Here is where it gets fascinating. Between the bullish RSI stretch, there was a 12 day space duration when the indicator fell below 50.
However, ten days back, RSI once again took a dip, it was below the 50 mark for 11 days. Thus, considering the possibility of a duplicated pattern, we might see Litecoin being in the bearish zone for 69 days until 27 April 2022.
Furthermore, Litecoin fell by 56.68 and 51.44% during both the bearish stretches. It can therefore be thought about that LTC would be up to $56 if it witnesses another 51% drop.
While rate patterns recommend a fall, on-chain metrics reveal that this could be avoided considering that LTC investors aren’t quickly scared. Since about 84% of all LTC holders are long players, the opportunities of a loss prevention sell-off are low.
Litecoin holder circulation|Source: Intotheblock– AMBCrypto
Although during the dip, brand-new financiers signed up with the network, the number of long-lasting holders likewise increased by 1.06 million addresses between December and February.
This shows that investors continue to trust the network regardless of the existing conditions. The important support now sits at $104.36, and if Litecoin fails it, $56 might be anticipated.