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The Litecoin price is holding on to a significant support area, but a breakdown below could take it to ₿0.004.
On December 26, cryptocurrency Twitter exposed a fake Litecoin Foundation that operates on YouTube and Facebook. The foundation scammed people out of their LTC, resulting in a total of 309 LTC being taken from various users. Luckily, this did not have a negative effect on the price of Litecoin, which has been decreasing since December 16.
Full-time trader @crypto_necro tweeted out that even though the Litecoin price is almost at an all-time low, the gradually decreasing volume while the price is getting lower is a good sign for the bulls.
$ltc
Volume is decreasing a good sign here.
Hacim dusuyor olmasi iyiye isaret. pic.twitter.com/rBc64PxYGu
— Necro (@crypto_necro) December 26, 2019
Is this really a good sign? If so, what does it mean for the future price movement? Continue reading below if you are interested in finding out.
Litecoin Significant Areas
The Litecoin price has been decreasing since June 12, having done so by 70%. While volume has indeed been decreasing, it has been extremely low since 2018. Thus, we do not believe that the slightly lower than usual volume holds a lot of significance.
There is a support area at ₿0.0055, which is the current price level, while the next support areas are found at ₿0.004 and ₿0.003, respectively.
Previous Breakdown
The Litecoin price had been trading inside a descending wedge since August 15. Even though the wedge is a bullish pattern, the price broke down from it on December 16 and decreased until it reached the aforementioned support area.
There is some bullish divergence in the daily RSI. But, without a bullish pattern such as a double bottom in place, it is not sufficient in predicting an upward move. Furthermore, it is transpiring after a breakdown from a long-term pattern, further reducing its significance.
The only possibility for this movement to lead to a bullish move would be if this was a fake breakdown and the lower price levels could not be sustained. However, ten days have passed since the breakdown and the price has not reclaimed its previous support by climbing into the wedge.
Therefore, the price is expected to continue downwards towards the next support areas.
Future Movement
Inside the support area, the price has created a short-term descending triangle, similar to the longer-term pattern from which it broke down.
The price made an attempt at breaking out, but generated bearish divergence as soon as it reached the descending resistance line and has been decreasing since.
The descending triangle is a bearish pattern. Thus, the short-term outlook aligns with the long-term one, indicating that LTC will eventually break down.
To conclude, the Litecoin price recently broke down from a long-term pattern and is currently trading inside a bearish, short-term pattern. The price is expected to break down and eventually reach ₿0.004.
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