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The Litecoin ($LTC) price has increased since August 17, creating a bullish double-bottom pattern.
A breakout from the descending resistance line will confirm that the correction is complete and that the bottom is in.
Litecoin Price Creates Bullish Pattern
The daily timeframe technical analysis for $LTC shows that the price has fallen under a descending resistance line since its yearly high of $115 on July 3. The decrease led to a low of $56 on Aug. 17. Litecoin bounced afterward, creating a long lower wick (green icon).
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While the price returned to its previous low on Sept. 11, it created a double bottom pattern. The double bottom is considered a bullish pattern, meaning it usually leads to breakouts. Furthermore, the pattern was combined with a bullish divergence in the RSI.
The RSI is a momentum indicator used by traders to assess whether a market is overbought or oversold and to make decisions about accumulating or selling an asset. Readings above 50 and a rising trend signal an advantage for bulls, while readings below 50 indicate the opposite.
A bullish divergence occurs when a price decrease is combined with a momentum increase. It is a bullish sign that often leads to significant increases.
If the cryptocurrency breaks out from the line, it can increase by 37% to the next resistance at $85. The 0.5 Fib retracement resistance level creates the resistance.
On the other hand, failure to break out will likely lead to a 20% drop in the $50 horizontal support area. If the price follows the resistance line, it will reach this area by the beginning of October.
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LiTC Price Prediction: Short-Term Breakout Can Catalyze Long-Term Increase
The technical analysis from the six-hour timeframe reiterates the bullish findings from the daily one.
Similarly to the daily timeframe, there is a significant bullish divergence in the six-hour RSI. This supports the creation of a double-bottom pattern and the beginning of a long-term increase. The indicator is above 50, another bullish sign.
Moreover, $LTC has broken out from a short-term descending resistance line. It is possible that this breakout will catalyze a breakout from the long-term descending resistance line, taking the price above the $85 resistance area.
Despite this bullish $LTC price prediction, failure to break out from the long-term descending resistance line will likely lead to a 20% drop to the closest support at $50.