After conducting the technical analysis from the higher time frames, we will proceed to smaller time frames.
On the weekly time frame, two main waves appear. In 2017, the price spiked and reached $374 per unit, but then dropped back to pre-2017 levels. The price then consolidated in years following, where it gained momentum upward in the second half of 2020. The price went from $50 to $258 in just a few months. That is a 400% return on investment, which easily beats the return from many stock indices and has driven increased Litecoin trading opportunities with brokers as well as crypto exchanges.
In the daily time frame, the uptrend becomes easier to see. The trend line can be drawn around three points. The price seems to respect this trend line, and it is not being broken by pullbacks. The uptrend does not appear to have ended yet. But a leg down could also take place. If the price goes above $340, this may open the door for further price growth.
In the four-hour time frame, a support level at $212 appears to be solid. The price was honored three times. Yet the upward momentum appears to be sinking. Prices may go down again before they resume their upward movement. It is important to note that a break below $212 level indicates that the trend has turned bearish.
Bitcoin’s technical analysis
Before trading Litecoin, it may be reasonable to analyze Bitcoin given the correlation or influence between the two cryptocurrencies. Since June 2015, Bitcoin has surged in price, and it reached a record price, now trading at $64,000. Ultimately, it turned a corner into a downturn. A bitcoin's price is currently around $54000. Bitcoin has clearly faltered for the time being. If buying momentum comes back, price may rise above resistance, but traders should wait for more signs of strength unless their time frame is very long-term. Spikes in Bitcoin would usually lead to spikes in the prices of other cryptocurrencies, including the price of Litecoin.
A smaller size “Bitcoin”
Charlie Lee, a former Google engineer, launched Litecoin back in 2011. If Bitcoin was gold, the engineer and his colleagues hoped to go after the silver of cryptocurrencies. Because Litecoin uses a different kind of encrypting than Bitcoin, its transaction speed is considerably faster. Besides its main feature, it has an excellent growth potential, as its price has increased from under $50 to above $200 in a matter of months. This took place after reports that Mr. Lee had sold his crypto holdings a few years ago.
In spite of the fact that Litecoin was not the first cryptocurrency out there, it was one of the earliest cryptocurrencies. That gives it a good reputation. Bitcoin fluctuates inversely with it, albeit more expensive. The fact that it is cheaper than Bitcoin makes it popular among plenty of low-budget traders.
Litecoin is a suitable cryptocurrency for traders with small capital. Also, it enables faster transaction speeds. Litecoin has been on an upward trend for a few months, though it has also faced some downward pressure. Since some time, Litecoin's price has been moving in an upward trend, although it experienced some downward pressure.