Litecoin Hits New 2022 High Against Bitcoin – But Will LTC Price Halve Before Halving?

Litecoin Hits New 2022 High Against Bitcoin – But Will LTC Price Halve Before Halving?

Litecoin (LTC) has become one of the rare winners in the ongoing cryptocurrency market crash caused by the collapse of the FTX exchange.

LTC Price Leads BTC, ETH

Born in 2011, the altcoin is up nearly 16% month to date (MTD) to hit $62.75 on November 22, outpacing its main competitors, bitcoin (BTC) and ether (ETH), which have lost roughly 25% and 30% respectively. , in the same period.

Daily LTC/USD price chart. Source: Trading View

In addition, the LTC/BTC price also rose to new highs, climbing 50% in November to set a new yearly high of 0.003970 BTC on November 22.

As Cointelegraph reported, Litecoin deviated from a broader downtrend in the crypto market earlier this month, with a halving scheduled for August 2023. support none other than Michael Saylor for being a bitcoin-like “digital commodity”.

However, there are signs of bullish exhaustion.

Litecoin price fractal hints at 50% correction

Litecoin’s rally against bitcoin has left LTC/BTC overvalued, according to the weekly Relative Strength Index (RSI).

Notably, the LTC/BTC weekly RSI, which measures the speed of the pair and the change in price movement, rose above 70 on November 22nd. An RSI reading above 70 is considered overbought, which many traditional analysts see as a sign of an impending bearish reversal.

Historically, overbought Litecoin RSI values ​​against Bitcoin have been followed by major price corrections. For example, in April 2021, the rise of LTC/BTC RSI above 70 triggered a strong sell-off reaction, causing the pair to fall 75% to 0.001716 BTC by June 2022.

Similarly, the overbought RSI in April 2019 led to a 70% correction in the LTC/BTC price by December 2019.

The same RSI fractal is now hinting at the possibility that Litecoin will suffer a 50% destruction compared to Bitcoin if it is combined with a multi-year LTC/BTC down channel pattern as shown below.

Weekly LTC/BTC price chart. Source: Trading View

As a rule, LTC/BTC becomes overbought after reaching the upper trend line of the channel, followed by a correction to the lower trend line.

As a result, the pair is at risk of falling to or below 0.001797 BTC by December 2022 if the fractal repeats, falling more than 50% from current price levels.

Conversely, a decisive break above the upper trendline could see LTC/BTC testing its 200-week exponential moving average (200-week EMA; blue wave) at 0.005319 BTC, 30% above current price levels. , as the next growth target.

Pair LTC/USD “bear flag”

Litecoin is seeing a similar price collapse against the US dollar as it paints a bear flag pattern on the weekly charts.

Related: ARK Invest Kathy Wood Adds More Bitcoin as GBTC, Coinbase Shares Hit New Lows

Bear flags are bearish continuation patterns that occur when price consolidates up inside a parallel range of an up channel after a strong down move (called a flagpole). They are resolved after the price breaks below the lower trendline and falls to the height of the flagpole.

Weekly LTC/USD price chart. Source: Trading View

LTC is trading inside a bear flag range, expecting a break below the lower trendline support around $55. The bear flag lower target is around $32.40 if it decisively breaks the indicated support i.e. a 50% drop by December 2022.

This article does not contain investment advice or recommendations. Every investment and trading step involves risk, and readers should do their own research when making a decision.