Litecoin (LTC) appears bullish from a short-term perspective, but the longer-term outlook suggests that the coin is heading towards a deeper crash. The technical indicators on the weekly chart indicate that a death cross is imminent, which would dismiss any chance of LTC’s recovery.
LTC 4-hour chart about to break out
On the four-hour chart, Litecoin is almost at the point of completing the falling wedge. The falling wedge is a pattern where the price continues to make lower highs and lower lows, but the downtrend loses momentum as selling pressure weakens.
Each downward move attracts buyers sooner, causing the range to narrow and volatility to contract. This reflects a shift in market psychology, where bears lose conviction while buyers quietly build positions, often setting the stage for a bullish breakout once the price breaks above the upper trendline.
Like a coiled spring expanding, LTC usually breaks out at the completion of the pattern. If the breakout plays by the book, LTC should spike by the width of the wedge at its widest point. This means that Litecoin could go beyond the psychologically important $100 level and reach $105.
However, before deciding on whether the breakout will happen, it is important to take a look at a higher time frame chart, which gives a better view, as it cuts out the noise and wild fluctuations on the short-term frame.
Death cross could interfere with Litecoin’s recovery
Although the short time frame looks very bullish, the weekly charts don’t show conducive conditions for a bull market. First, the 50-day moving average is approaching the 200-day MA, and a death cross could occur. When a death cross happens, the prices take a deep crash instantly.
This does not look good for LTC, which has already lost its way out of the symmetrical triangle. Inside this pattern, volatility contracts as each swing gets smaller, showing indecision and energy building. The breakout is confirmed when the price closes decisively above or below one of the trendlines, ideally with volume expansion.
However, in LTC’s case, the pattern is dismantled and out of play. Even if investors had the slightest hopes that Litecoin would recover and fall back within the pattern, the death cross dismissed all positive hopes. If LTC continues its downtrend, it will reach $60.
