Litecoin has been faced with a daunting rejection of the 200 exponential moving average (EMA) after making a fifth consecutive lower high since June.
The world’s seventh-largest cryptocurrency is now in danger of dropping back towards the $47 level of support.
Litecoin’s four-hour chart also shows the early stages of a head and shoulders pattern, with the left shoulder and neckline both seeing surges of volume.
Head and shoulders patterns are typically indicative of a reversal in price action, which would be in keeping with the recent rally.
Despite trading at just $37 before the new year, Litecoin spiked all the way up to $64 on January 17 before beginning a corrective move to the downside.
If LTC is to pick itself back up and rally to the upside, it needs to close daily candles above the 200 exponential moving average, which has historically been a bitter point of resistance.
The 200 EMA is also in confluence with the $59 level of resistance that suppressed price on numerous occasions throughout October and November.
A breakout above $59, coupled with Bitcoin’s upcoming halving, could indicate a transition into a bull market, with upside price targets of $77, $90, and $100.
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