LTCUSD could be in for more gains from here as price just broke above the neckline of a complex double bottom formation. Price dipped to 34.00 then to 36.00 before rallying back above the 42.00 level.
The chart pattern is around 7.00 points tall so the resulting climb could be of the same size, taking LTUCSD up to 49.00-50.00. The moving averages are still completing an upward crossover, which might draw more bulls to the mix.
Stochastic is pointing up to suggest that buyers are in control of price action, but the oscillator is dipping into the overbought region to signal rally exhaustion. RSI is also indicating overbought conditions and turning lower could draw sellers back in, possibly leading to another dip in litecoin.
If so, it could put price in an ascending channel pattern, which would still be indicative of an uptrend but at a slower pace. A break below the 36.00 level, however, could signal a pickup in selling pressure and lead to a test of 34.00 or perhaps a break lower.
Compared to most of its other cryptocurrency peers that are stuck in consolidation, litecoin has been advancing since the start of July. Dollar weakness has also contributed to the rise of LTCUSD as traders continue to doubt that the Fed can be able to hike rates one more time before the end of the year.
The NFP report is up for release later this week and leading indicators could provide clues on how this jobs figure might turn out. Indications that a weak result is in the cards could lead to more dollar selling to the benefit of litecoin and possibly other cryptocurrencies. An impressive read, on the other hand, could encourage dollar bulls to charge.
The addition of litecoin on Bitstamp has been credited for the recent rally as this could mean larger trading volumes and better liquidity for the cryptocurrency. “In terms of the technical differences between the two currencies, Litecoin has activated Segregated Witness. This may pave the way for the introduction of new technologies such as the Lightning Network, which expands the potential of what can be achieved on the Litecoin network,” wrote Bitstamp in a statement.
