LTCUSD recently broke out of its descending channel pattern to signal a reversal from the downtrend. Price has staged a strong rally since and has also broken past a bullish flag consolidation pattern.
Note that the mast of the flag spans $24 to $44 so the resulting climb could be of the same size, taking LTCUSD up to the $64 level and beyond. The 100 SMA is above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. Also, the gap between the moving averages is getting wider to reflect strengthening bullish pressure.
Stochastic is also pointing up so LTCUSD could follow suit. RSI, on the other hand, is turning lower to suggest a pickup in selling pressure. If so, a pullback to the channel resistance could happen before the climb resumes. Nearby support is also located at the $40 psychological mark.
Risk aversion seems to be returning to the markets as traders are veering away from the monetary policy focus last week and onto political risks. For one, there’s the special elections in Georgia that might be indicative of wavering support for the GOP and the Trump leadership. If so, the Trump rally could unwind and lead to dollar losses, which would boost LTCUSD.
In Europe, there is still some focus on the Italian banking crisis as debt repayments have been postponed. Also, Brexit talks are set to start and any hostilities could mean more risk-off flows, especially if investors start moving their funds to alternative markets like cryptocurrencies.
As for litecoin, anticipation of listing on Bitstamp lead to a huge boost in price. The activation of SegWit on the network has led to a lot of positive attention and excitement that could keep LTCUSD treading north. Apart from that, strong interest from Chinese and Korean traders have also led to litecoin gains and UASF and UAHF are getting closer to activation.
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