In early Sunday trading, Litecoin is once again testing the critical support of the 50-day moving average as the broader Crypto market woes persist.
At the time of writing, Litecoin is trading at $228.0, having been as low a 223.26 earlier in the session. Like much of the crypto universe, the coin had enjoyed a stellar start to 2021, rallying as much as 167% to the 2021 high of $335.36 earlier in the month. Again like many of its peers, Litecoin has since found itself struggling under the weight of liquidation as sentiment in the broader market sours.
As is often the case, altcoins tend to outperform Bitcoin on the way up and the opposite can be said on the way down. Litecoin has stayed true to this maxim, losing over $128 (38%) in value from its highs to Thursday’s low print of $207.
Whilst the recent plunge may be viewed as extreme, bulls may argue that volatility is the price you pay for performance. Litecoin is no stranger to this, having seen sell-offs of a similar magnitude twice in 2021.
In what can only be described as a bloodbath, January saw Litecoin crater -39% from $170.78 to $112.75 in the space of 24 hours. The market went on to make new highs for the year within a month.
In February we witnessed a similar -38% correction (played out over the course of a week). Again, prices eventually recovered, surpassing the previous high by mid-April.
Given the market’s track record, we wonder if a similar recovery could play out this time around?
Litecoin price outlook
As the Daily chart shows, the key to answering the above question could be the Moving averages. Over the course of this latest bull run, both the 50 and 100 day MA’s have proved major areas of support.
Currently, the price sits marginally above the 50-day MA at $221 and the 100-day at $195.45. Bulls may look to add speculative longs around the current price levels. However, the Bullish thesis is negated on a close below the 100-day MA.
Litecoin Daily Chart
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