With a rising wedge completing a bearish pennant pattern for Litecoin, the bullish grip over trend control weakens. A 7.75% risk looming over Litecoin warns of a bearish fracture in the crucial 4-hour support trendline.
Despite the bullish recovery in Bitcoin prices in a highly volatile backdrop, Litecoin struggles to sustain the uptrend.
With a lack of support from trading activities, a bearish reversal looms over the LTC prices. Will Litecoin survive the sudden threat of a 7.75% correction to $58?
Litecoin’s Rising Wedge Turns the Tables
In the 4-hour chart, Litecoin’s recovery run after the bearish crash last Monday forms a V-shaped pattern. The reversal rally accounts for a price jump of 26.87% over the last nine days.
However, the rally rises under a bearish influence, leading to an overhead resistance trendline. With the recovery rally failing to gain trend momentum, the declining volatility results in a rising wedge pattern.
Coupled with the prevailing downtrend, the rising wedge completes a bearish pennant pattern in the 4-hour chart.
Currently, Litecoin is trading at $63.44 as it reveals a second consecutive bearish candle with higher price rejection from the resistance trendline. Hence, Litecoin faces the threat of a negative cycle breaking under the rising wedge pattern.
Litecoin’s Target Levels
The stochastic RSI lines (blue and red) give a bearish crossover in the overbought zone, reflecting bullish exhaustion.
Furthermore, the recovery rally has surpassed the 20, 50, and 100 EMAs at $62.14, $61.75, and $63.33, respectively. However, the upcoming negative cycle puts stress on the 100 EMA and may shortly result in a breakdown.
Based on the Fibonacci retracement level over the correction phase, the bull run is struggling to surpass the 50% Fibonacci level at $64.46. Furthermore, the bullish dominance at the 100 EMA in the 4-hour chart is at risk as the supply pressure increases.
A bearish breakdown below the support trendline holding the reversal rally will result in a massive crash for Litecoin. If the bearish trend begins, the next support levels are the 38.20% Fib level at $61.78 and the 23.60% Fib level at $58.46. The base level of the Fibonacci retracement is at $53.11.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
