Litecoin (LTC) recently faced a downward trend following a bounce off its 200-day EMA. The retest of the $62 support level attracted strong buying pressure, propelling LTC above both the 20-day and 50-day EMAs.
This surge in buying activity has given bulls a short-term advantage, although Litecoin remains in a crucial inflection zone.
Currently, LTC is trading around $66.33, showing a 1.7% decline over the last 24 hours.
Could Litecoin Bulls Stage a Comeback?
The latest daily chart highlights LTC’s recovery from the $62 support level, pushing it beyond the 20-day and 50-day EMAs. With LTC now hovering around these EMAs, the price stands at a significant juncture.
If buyers manage to drive prices above these EMAs, Litecoin could extend its uptrend, setting sights on the 200-day EMA at approximately $71.
In contrast, a close below the 20 and 50-day EMAs may expose LTC to a retest of the trendline support near $62, potentially delaying any recovery.
Although still in the negative zone, the MACD indicator hints at a potential bullish crossover as the MACD line nears the signal line. A confirmed crossover could indicate a shift in momentum favoring buyers.
A dip below the zero mark for either of these lines would suggest mounting selling pressure.
Insights from Derivatives Data
Derivatives data for Litecoin reflects mixed sentiment. The 24-hour long/short ratio stands at 0.9654, indicating a balanced outlook among traders.
However, bullish sentiment is more pronounced on Binance and OKX, with long/short ratios at 2.2862 and 2.55, respectively. This suggests optimism from traders on these platforms regarding LTC’s potential upside.
While the open interest for LTC options dipped by 2.95%, signaling some caution among traders amid recent price swings.
Data on liquidations reveals a dominance of long positions, with significant liquidation of short positions in the last 12 hours. This scenario hints that bullish momentum might have further room to grow given the pressure on short-sellers to exit.
Traders should remain vigilant about Bitcoin’s movements, as broader market shifts are likely to impact Litecoin’s trajectory. As of now, LTC stands at a critical juncture, and a decisive move above or below the EMAs will chart its short-term course.