After a brief dip below the $60 support level on September 11, Litecoin (LTC) managed to claw its way back above this crucial threshold. Interestingly, on September 13, Litecoin recorded its highest number of daily active addresses for the month.
For those unfamiliar, daily active addresses refer to the unique wallet addresses that engage in transactions on the network within a 24-hour period. A surge in this metric often indicates heightened user activity and can be a bullish sign for the asset.
Source: Santiment – Start using it today
Breaking Key Support Zones: A Red Flag
However, the recovery was short-lived. Litecoin recently experienced a bearish breakout from a Channel Down pattern, a technical formation that typically signals a continuation of a downtrend. Adding to the concern, the price has now shattered the $65 support zone, a level that had previously held strong in August, March, and December 2022.
The breach of this critical support area is a significant indicator of underlying weakness and raises the possibility that the price could plummet to the next support level at $50. Investors should consider setting price alerts to stay ahead of the game.
Source: altFINS – Start using it today
A Mixed Bag of Momentum Indicators
When it comes to momentum, the signals are mixed. On the one hand, the Moving Average Convergence Divergence (MACD) line is above the MACD Signal Line, which is generally considered a bullish sign. On the other hand, the Relative Strength Index (RSI) is below 45, indicating bearish momentum. To add another layer of complexity, the MACD Histogram bars are on the decline, suggesting that the bullish momentum may be losing steam.
Support and Resistance: What’s Next?
As it stands, Litecoin’s nearest support zone is at $50, while the immediate resistance levels are at $65 (which was the previous support) and $75. These zones will be critical in determining Litecoin’s future price trajectory.
Conclusion
In summary, Litecoin is currently navigating through turbulent waters. While the spike in daily active addresses offered a glimmer of hope, the subsequent break below key support levels has cast a shadow on its short-term outlook. With mixed momentum indicators, the asset appears to be at a crossroads. Investors should keep a close eye on the $50 and $65 levels, as they could serve as pivotal points for Litecoin’s next big move. Whether this will be a rebound or a further descent remains to be seen, but one thing is clear: caution is advised.
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