Litecoin (LTC) price rebounded above $200 but later hit resistance near the 0.5 Fibonacci retracement level
Litecoin‘s price increased by 5% in early morning trades on Wednesday, with LTC/USD recovering from lows of $197 to trade above $200. While the 9th ranked cryptocurrency has not managed to spike higher, it is likely Bitcoin’s upward trajectory above the $55k level will help LTC bulls aim for higher ground.
However, bulls are likely to find it difficult to sustain the upside momentum if sellers push prices below $200.
At the time of writing, LTC was trading at $201. According to data from CoinMarketCap, Litecoin’s intraday trading volume has shrunk by 30.4% to $5.4 billion. The decreased volume could signal a lack of enthusiasm among bulls, allowing sellers to strengthen their attack on the critical $200 level.
If this happens, LTC/USD could move further away from the all-time peak of $375, which it reached on 19 December 2017. Currently, Litecoin price is about 46% off that all-time high.
On the network development front, the Litecoin Foundation has announced that the MimbleWimble Extension Block (MWEB) is “Code Compete“. This means that Litecoin has moved one step further towards enhancing its scaling. Apart from that, activation for the code will introduce new privacy features, improving upon Litecoin’s transaction anonymity.
Litecoin price outlook
The past 48 hours have seen Litecoin’s price action remain within a tight range above $200. The lack of a decisive move out of the range sees bulls face a tough task keeping bears away.
The positive thing for buyers is that LTC/USD is well supported above the 100 SMA ($194.4). If prices break higher and settle above the 0.5 Fibonacci retracement level ($206), the next target would be a crucial horizontal resistance line just above $220.
The upside correction from this level to the $230 price zone is likely given the Parabolic SAR is below the candlesticks on the 4-hour chart. Continuation of the bullish outlook for the LTC/USD pair could open up a retest of $240, with a potential for buying pressure towards $300.
On the downside, Litecoin is likely to flip negative if it crosses below the 100 SMA. This move could invite more sellers and see prices drop past the seven-day low of $190.
The RSI also remains below the midpoint to suggest bearish pressure holds. If fresh selling occurs, it is possible LTC prices could decline to an old descending trend line. The primary support along this line is at $180, although an extended sell-off could encourage bears to target $170.