Litecoin Hits New 2022 High vs. Bitcoin — But Will LTC Price “Halve” Before Halving?
Litecoin (LTC) has emerged as one of the rare winners in the ongoing cryptocurrency market meltdown led by the collapse of the FTX exchange.
LTC price surpasses BTC, ET
The 2011-born altcoin rallied nearly 16% month-to-date (MTD) to reach $62.75 on November 22, outpacing its top rivals Bitcoin (BTC) and Ether (ETH), which respectively stand at approx. 25% and 30%. , in the same period.
Furthermore, the LTC/BTC price also surged to new highs, gaining 50% in November to establish a new annual high of 0.003970 BTC on November 22.
As Cointelegraph reported, Litecoin diverged from the broader downtrend in the cryptocurrency market earlier this month with a halving scheduled for August 2023. LTC has also received a endorsement from none other than Michael Saylor for being a Bitcoin-like “digital commodity”.
says Michael Saylor #Litecoin is also probably a digital commodity like Bitcoin: pic.twitter.com/7N19IpxtSee
— Altcoin Daily (@AltcoinDailyio) 18 November 2022
Still, signs of bullish exhaustion are emerging.
Litecoin price fractal suggests 50% correction
Litecoin’s rally versus Bitcoin has made the LTC/BTC pie overvalued, according to its weekly Relative Strength Index (RSI).
Notably, LTC/BTC’s weekly RSI, which measures the pair’s speed and change of price movements, rose above 70 on November 22. An RSI reading above 70 is considered overbought, which many traditional analysts see as a sign of an impending bearish reversal.
Historically, Litecoin’s overbought RSI readings versus Bitcoin have been followed by large price corrections. For example, in April 2021, the LTC/BTC RSI’s rise above 70 met with a strong selling reaction, which eventually pushed the pair down by 75% to 0.001716 BTC by June 2022.
Similarly, an overbought RSI in April 2019 led to a 70% LTC/BTC price correction by December 2019.
The same RSI fractal now suggests Litecoin’s possibility of undergoing a 50% wipeout versus Bitcoin if combined with LTC/BTC’s multi-year descending channel pattern, as shown below.
Typically LTC/BTC turns overbought after hitting the upper trendline of the channel, which follows up with a correction towards the lower trendline.
As a result, the pair risks a drop to or below 0.001797 BTC by December 2022 if the fractal repeats, down more than 50% from today’s price level.
Conversely, a decisive breakout above the upper trendline could see LTC/BTC test its 200-week exponential moving average (200-week EMA; the blue wave) of 0.005319 BTC, up 30% from today’s price level, as the next upside target.
LTC/USD pair “bear flag”
Litecoin is seeing a similar price crash against the US dollar as it paints a bearish flag pattern on the weekly charts.
Related: Cathie Wood’s ARK Invest adds more Bitcoin exposure as GBTC, Coinbase stock hits new lows
Bear flags are bearish continuation patterns that appear when price consolidates higher within a parallel, rising channel area after a sharp move lower (called a flagpole). They resolve after the price breaks below the lower trendline and falls by as much as the height of the flagpole.
LTC has been trading within the bearish flag, eyeing a break below the lower trendline support around $55. The downside target for the bear flag is around $32.40 if it breaks decisively below said support.
In other words, a 50% reduction by December 2022.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
