Why LTC may not provide a buying opportunity if it retests $60 as support

With a powerful showing of force, Litecoin attempted to break out past the $63 resistance level in early November. The bullish mission was successful for a few days. Despite the fact that the $72-$80 region would provide stiff resistance, it appeared that Litecoin could push higher. Bitcoin, too, had a bullish vibe when it hit the $21.5k mark.

Michael Saylor’s mention of Litecoin in recent hours saw the coin experience a hike in social dominance, but no strong effect was seen on the price charts. Lower timeframe charts showed LTC to be in a downtrend, and a move below $60 could see LTC drop all the way down to $50. With Bitcoin beneath the $16.2k support, the bulls could soon face a rough time.

Litecoin retests midrange as support but patience could be key

Litecoin sees some wicked volatility but manages to defend $50

Source: LTC/USDT on TradingView

Litecoin formed a range (white) between $73 to $47.7, with the mid-point of the range (dashed red) at $60.5. LTC has traded within this range since mid-May. In mid-June, the price fell beneath the range lows to test the support at $40.2. Since then the price has bounced back. While the price traded within a range, the On-Balance Volume (OBV) has made higher lows since June.

This indicated heightened buying pressure and could be a sign of accumulation. In early November, Litecoin caught a large bout of volatility. The price pumped to the range highs at $73 but fell to the lows at $47 within a matter of 4 days from 5 November to 9 November.

At the time of writing, the Relative Strength Index (RSI) was just above the neutral 50 line. It hadn’t wandered far from the 40 or 60 values for long periods, which highlighted the fact that LTC did not see a strong trend in recent months.

Neither long nor short positions were a smart choice for higher timeframe traders at press time, as LTC traded near the mid-range mark. A fall beneath the $60 mark can give the lower timeframe bears some impetus.

Mean coin age in decline to show increased coin movement between addresses

The mean coin age (90-day) metric began to slide in October and has been on a descent since. A rise in this metric denoted a network-wide accumulation, while a fall in this figure showed more LTC was being exchanged between addresses. The 30-day Market Value to Realized Value (MVRV) ratio crept into positive territory in the past few days but was back toward the zero mark.

Although relatively low, the peaks on the MVRV have tended to mark local tops in the price. Therefore, there was the possibility that another wave of selling could commence if the MVRV ratio fell beneath 0 to show that, on average, 30-day holders faced losses.

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