Source: PaxForex Premium Analytics Portal, Fundamental Insight
Litecoin maintains its medium-to-long-term bullish trend and positioned itself for a fresh run to crack the $100 level for the third time this year. The upcoming halving event, roughly two-and-a-half months away, provides a floor under any bearish move, as enthusiasm over the potential upside potential is high. Price action formed a higher lower during its previous correction from above $100, adding to bullish momentum, and the current pause in the uptrend has formed a flag formation, which is a continuation pattern, suggesting more upside ahead.
Meme tokens and NFTs add to bullishness and could help drive Litecoin higher. After Ordinals added to network congestion on the Bitcoin network, increasing gas costs and pushing prices higher, the hype has crossed over to Litecoin and Dogecoin networks. It helped elevate network activity on all three blockchains to all-time highs. The upcoming Litecoin halving event, slated for August, combined with the meme token and NFT craze, could catapult the LTC/USD higher over the summer months, making it a top-performing cryptocurrency.
Adding another bullish catalyst for Litecoin is the market value to realized value (MVRV) Z-score. Many analysts consider the MVRV-Z score a more accurate fair value indicator of the network. The market value multiplies all Litecoins in circulation by the current market price. The realized value adds the market value of coins when they last moved on the Litecoin blockchain and excludes all coins lost in circulation, which some estimate to be around 15%. The Z-score indicates how many standard deviations the market value differs from the realized value. A negative value indicates an undervalued market and a reading above 8.0 suggests an overvalued market.
The forecast for the LTC/USD remains cautiously bullish after this cryptocurrency pair completed a breakout above its Ichimoku Kinko Hyo Cloud, which narrowed and flattened out. Volatility could rise this week as bulls and bears fight for control after the Kijun-sen flatlined while the Tenkan-sen moves higher. A bullish crossover could tip the strength toward bulls. Traders should also monitor the CCI after it recorded a lower high in extreme overbought territory before breaking down. This technical indicator could slide further but maintain its position above zero, which favors a more medium-term upside. Can bulls regain complete control over the LTC/USD and push price action toward its horizontal resistance area and a fresh 2023 high? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000+ pips per month.
Should price action for the LTC/USD remain inside the or breakout above the 88.90 to 92.10 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 90.20
- Take Profit Zone: 101.15 – 105.20
- Stop Loss Level: 85.40
Should price action for the LTC/USD breakdown below 88.90, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 85.40
- Take Profit Zone: 74.85 – 76.80
- Stop Loss Level: 88.90
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.
