- Litecoin price has been on a smooth uptrend since September 28, rising 33%.
- As LTC hovers around the $177.78 resistance level, the MRI flashed a sell signal, hinting at a correction.
- A retracement toward the $163.89 is likely before LTC can kick-start an uptrend to $232.94 and $258.67.
Litecoin price is having trouble around a resistance level and is hovering around it after nearly ten days of ascent. One indicator, however, is suggesting a sell-off is around the corner, adding credence to the short-term bearish outlook.
Investors need to understand that this correction is necessary for LTC buyers to recuperate and kick-start a new uptrend.
Litecoin price experiences exhaustion
Litecoin price rose roughly 40% after creating a local bottom on September 28. This ascent faced almost no resistance as it ascended until it encountered the $177.78.
Now, LTC is likely to undergo a minor sell-off or enter a period of consolidation between $177.78 and $163.89 barriers. Supporting this outlook is the red ‘one’ sell signal from the Momentum Reversal Indicator (MRI). This technical formation forecasts a one-to-four candlestick correction. While it is unsure if Litecoin price is going to retest the lower end of this range, investors can expect a reaction off the $170.61 level.
The buyers can make a comeback here since it served as a stopping point before the second leg of the uptrend.
In this case, Litecoin price will head straight to the $189.75 resistance level and collect the buy stop liquidity resting above it. Flipping this hurdle into a platform will allow LTC bulls to continue this ascent to $232.94, constituting a 36% ascent from $170.61.
While some investors might decide to book profits here, there is a chance for Litecoin price to continue this ascent and tag the 50% Fibonacci retracement level at $258.67.
LTC/USDT 1-day chart
While things are looking good for Litecoin price from a short-to-mid-term perspective, a breakdown of the $163.89 support floor will indicate that the buyers expect a greater discount.
In such a case, LTC might wander toward the $148.41 demand barrier. A breakdown of this barrier will invalidate the bullish thesis and could trigger a correction to $139.80.