The recent uptick in cryptocurrency markets has seen various tokens make significant strides, and Litecoin has been among the frontrunners of this resurgence. Litecoin’s price soared to a 14-day high of $68 on August 18, marking an impressive 37% rebound from the lows of $50 seen earlier in the month on August 5. This rally has designated Litecoin as the standout performer within the top 20 crypto assets over the past fortnight.
Notably, the legalization of crypto mining in Russia stands as a consequential factor bolstering the uptrend in Litecoin’s valuation. The green light for mining within the Russian jurisdiction has spurred a particular interest in Proof of Work-based cryptocurrencies, to which Litecoin belongs, along with the flagship crypto, Bitcoin. Amidst a prevailing focus on Proof of Stake tokens, such as Ethereum and Solana, Litecoin’s surged performance underscores a revived market appetite for the Proof of Work consensus mechanism.
Despite these gains, Litecoin faces a substantial hurdle ahead. A major resistance level looms at the $70 mark, and current on-chain data paint a potentially bearish picture for the short term. A scrutinization of the Exchange Market Depth data reveals a considerable imbalance—sell orders overshadow the buy orders by value, painting a picture of prevailing bearish sentiment among traders. This imbalance suggests that Litecoin’s ascent may be curtailed before it garners any further momentum.
Technical analysis using the Ichimoku Cloud and Relative Strength Index (RSI) Divergence Indicator corroborates the cautious outlook, suggesting a pullback could be imminent. A failure to break past the $70 resistance could see Litecoin’s price retracting to its support level at $63.49, or even further down to the $60 support zone.
Conversely, should Litecoin power through the resistance at $70, there’s a window for a potential rally, with the next target lying within the $75-$80 range. However, given the current market conditions and the prevailing order book’s complexion, a downward correction appears to be the more likely scenario in the near term. Investors and traders will need to pay close attentiveness to market signals as Litecoin approaches this critical junction, with existing data suggesting the path of least resistance may be to the downside.
