Litecoin has defied all odds by bouncing 10% following its desperate overnight descent to $50, with LTC now trading at $55.
The psychological $50 level of support is also in confluence with the 200 exponential moving average (EMA) on the four-hour chart, which has been a bitter point of support and resistance since October.
Litecoin now needs to close its daily candle above the $55 level of resistance in order to remain in a bullish posture over the typically low-volume weekend.
Failing that, if Litecoin falls back below $50, it could enter the opening stages of a prolonged downtrend, which will likely cause a further decline towards downside targets of $47 and $44.
However, much of this depends on the direction of Bitcoin over the coming days. The world’s largest cryptocurrency has endured an almighty slump from $9,200 to $8,400 in recent days, and a move down to the $7,800 region could also see Litecoin make a dramatic move to the downside.
If Bitcoin can rally above the $8,450 level of support before tonight’s daily close, it could signal a bullish end to the month, which would in turn drive Litecoin’s price to the upside.
The Bitcoin halving event in May is expected to increase interest in cryptocurrencies as miners will be incentivised to increase the price in order for the industry to stay profitable.
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.