Litecoin (LTC) Price Faces Downward Pressure as Divergence Signals Emerge

Matthew Dixon, CEO of Evai, has shared insights on Litecoin's (LTC) price trends, signaling potential downward pressure despite its recent breakout.

Cryptocurrency prices today: Litecoin (LTC) price signals suggest a possible correction

Evai CEO’s tweet highlights potential bearish divergence in LTC’s chart, suggesting a price downturn.

After a breakout from a key resistance level, Litecoin (LTC) price has encountered resistance at a downtrend line, forming a technical setup known as "divergence." This divergence may signal a potential correction in LTC's upward momentum.

According to a tweet by Matthew Dixon, CEO of Evai, Litecoin's price chart showcases two hidden bearish divergences and one regular bearish divergence. These divergences indicate that the market may be preparing for a pullback or a reversal in the upcoming sessions.

LTC’s price has shifted from around $60 to $90 recently. However, a downward sloping resistance line, which has been tested several times, shows that the price has faced some resistance.

Currently, LTC trades around the $81 price level, indicating that it is approaching a critical zone near this resistance. A breakout above this level could suggest bullish continuation, but the divergence signals might raise concerns about a potential pullback before any further upside.

Key support zones for LTC are located around the $60-$70 range, where the price has previously consolidated. Notably, the price has recovered several times from this level and found some stability around $75. These might be crucial in deciding if Litecoin can continue to rise or see a more substantial reversal.

Litecoin’s divergence signals indicate weakening momentum

Dixon's tweet highlights two main divergence signals present in Litecoin's chart. Hidden Bearish Divergence occurs when the price action shows higher highs, but the RSI forms lower highs, suggesting weakening bullish momentum.

However, Regular Bearish Divergence occurs when the price makes a new high but the RSI fails to create a new high in response, indicating that the upward momentum may be losing strength.

These two divergence patterns are commonly used by traders as warning signs that suggest a potential short-term market decline. With LTC currently near a critical resistance level and these divergence signals in play, the market could experience a shift in direction if these trends continue.

RSI and moving averages: Key indicators to watch

Litecoin's recent technical indicators present a mixed outlook. The RSI, situated around 65.89, is in the neutral zone but approaching overbought levels. While the RSI shows bullish divergence, its movement towards overbought territory suggests that LTC may encounter resistance soon.

Moreover, the 50-day MA (blue line) has crossed above the 200 one (orange line), forming a bullish signal known as the "Golden Cross." This crossover indicates positive momentum, but the recent divergence signals could offset the optimism this indicator typically brings.

Litecoin's technical chart presents a mixed outlook. While some indicators suggest the potential for upward momentum, the bearish divergence patterns and resistance at key levels may lead to a price correction.

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