- Litecoin’s breakout from a multi-year triangle highlighted bullish momentum towards the $136 and $232 resistance levels.
- The MVRV ratio and institutional activity indicated cautious optimism for further growth.
Litecoin [LTC] has recently broken out of a multi-year symmetrical triangle pattern, marking the end of a long-term consolidation phase.
At the time of writing, LTC was trading at $112.32, reflecting a rise of 0.86% in the last 24 hours.
The outbreak has attracted a lot of attention from traders, raising expectations for a continued bullish rally.
The question now is whether Litecoin can continue its upward trajectory and reach the expected $400 mark.
Litecoin: Strong rally ahead
This breakout, driven by strong momentum, has set the stage for a bullish rally, with critical resistance levels at $136 and $232 in focus.
Litecoin’s price action signals a solid opportunity to test these levels, which will serve as key indicators of its trajectory.
Furthermore, the breakout of the symmetrical triangle underlines renewed buying interest, further strengthening the case for continued upward movement.
Overcoming these resistance points will be crucial for Litecoin’s path to $400.
Source: TradingView
Technical indicators paint a promising picture for Litecoin’s potential price appreciation. The Relative Strength Index (RSI) stood at 61 at the time of writing, indicating bullish momentum while remaining below overbought conditions.
Furthermore, the 9- and 21-day moving averages recently formed a bullish crossover, confirming the trend reversal.
These indicators suggest that Litecoin has the momentum to continue its rally, provided market conditions remain favorable. However, traders should watch for signs of overextension as the price approaches the resistance level.
Source: TradingView
Statistics on the chain show strong networking activity
On-chain statistics offer a mixed outlook for Litecoin’s rally. The “in the money” measure shows an increase of 1.15%, indicating profitability for a slightly larger share of holders and increasing investor confidence.
Concentration statistics show an increase of 0.13%, reflecting growing interest from large companies.
However, net network growth lags at just 0.37%, categorized as bearish, while large trades have declined by 3.22%, indicating possible hesitation among institutional players.
Therefore, continued network activity and large trades will be critical in driving further price action.
Source: IntoTheBlock
LTC MVRV ratio and price-DAA divergence create caution
Litecoin’s MVRV ratio of 25.41% suggests that Litecoin’s price is moderately valued, leaving room for further gains without immediate risk of being overbought.
However, the difference between price and DAA (daily active addresses) of -71.57% raises some concerns as it reflects a slowdown in address activity relative to the price increase.
This difference could indicate potential volatility if network activity fails to keep up with the recent price increase. Therefore, investors should remain cautious when assessing short-term risks.
Source: Santiment
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Conclusion: Can Litecoin Reach $400?
Litecoin is showing strong technical signals, pointing to potential for continued growth. However, the mixed on-chain metrics and resistance levels at $136 and $232 could challenge the rally.
With continued momentum and increased network activity, Litecoin could realistically reach its $400 target. Therefore, its success will depend on how it overcomes these key hurdles in the coming weeks.
