Litecoin price hit a 14-day high of $68 on August 18, marking a 37% rebound from monthly lows on August 5. On-chain data trends signal early profit-taking moves; how will LTC react in the coming week?
Litecoin Breaks $65 Resistance
Litecoin has been a standout performer among the top 20 crypto assets over the past two weeks. The recent legalization of crypto mining in Russia appears to have been one of the main catalysts for LTC’s rally.
Following the announcement of new Russian crypto mining legislation, investor sentiment towards Proof-of-Work coins like LTC has improved significantly. The shaded area in the chart above shows how LTC prices have risen over the past 14 days, since the major market crash on August 5. As of August 19, LTC is trading above $65, representing a 37.65% gain.
Notably, Litecoin has outperformed major Proof of Stake coins such as Ethereum and Solana during this period, confirming the prediction that the improving international regulatory stance on cryptocurrency mining has increased market demand for PoW coins such as Litecoin. However, having established a solid support base above the $65 area, Litecoin price now faces a major hurdle that could potentially prevent the rally from moving into the next phase.
Short-Term Traders Looking to Take Early Profits on $97M LTC
After breaking through the $65 resistance, sell orders have increased, hinting at a potential unwinding of bullish sentiment. This suggests that after weeks of outperforming the market, short-term traders who bought LTC during the market crash around August 5 are now looking to cash in on some of their gains.
The exchange market depth metric aggregates Litecoin orders across multiple cryptocurrency exchanges, providing a comprehensive view of supply and demand in the market.
According to the exchange market data, the total number of Litecoin buy orders is 1,394,380 LTC, and the total number of sell orders is 1,448,100 LTC. With an average ask price of $66.93, the value of buy orders is approximately $93.3 million. In contrast, sell orders, valued at an average ask price of $66.96, are approximately $96.96 million. The difference between the total value of buy orders and sell orders is -$3.64 million, indicating that sell orders exceed buy orders in value.
This imbalance in the supply and demand dynamics of the market points to a bearish outlook. The significant volume of sell orders, especially from the bears who were in control just a few days ago, could prevent Litecoin from rising further. The lack of demand could lead to a price correction phase as the week progresses.
LTC Price Forecast: Major Hurdle at $70
Looking ahead, Litecoin faces a critical resistance level at $70. The Ichimoku Cloud and the RSI divergence indicator point to a bearish outlook in the short term. The Ichimoku Cloud, often used to identify trends and reversals, shows resistance near the $70 mark, which coincides with the upper boundary of the cloud. This suggests that Litecoin may have difficulty breaking this level in the near term.
Additionally, the RSI divergence indicator, which measures the strength of price action, is currently at 53.06, indicating a potential slowdown in upward momentum. This bearish divergence increases the likelihood of a pullback, especially if sell orders continue to outweigh buy orders.
If Litecoin fails to break the $70 resistance, it could fall back to the $63.49 support level. A break below this level could lead to Litecoin retesting the $60 support zone. Conversely, a successful break of the $70 resistance could open the door for a rally towards the $75-$80 range. However, given the current market conditions and the imbalance in the order book, the odds are leaning towards a bearish correction.
