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Are we in the midst of an accumulation phase?
Litecoin has bounced a bit during the session on Thursday, as we continue to see the $100 level offer a bit of support. There have been multiple attempts to break down through the $100 level, but so far, they have all been resisted. It is worth noting that the lows keep getting rejected, while the highs keep getting lower. Because of this, there is a certain amount of downward pressure and an attempt to break down, so it will be interesting to see if this plays out sooner or later.
If we do break down below the $90 level, then I think it does smash through all of the support, opening up a massive amount of downward pressure. There has been such a huge attempt to support the market in this area, I would have to assume that breaching it would be a major turn of events. In that scenario, I think that we could see Litecoin get hammered. I would anticipate a move to the $75 level at the very least.
Keep in mind that Litecoin is a smaller cryptocurrency, so it is going to have influence thrust upon it by the larger markets such as Bitcoin. For what it is worth, Bitcoin did rally during the day, and it looks as if it is dancing around the $40,000 level. If Bitcoin can pick up a little bit of momentum, this likely will make Litecoin bounce a bit as well. From a technical analysis standpoint, this is a market that has been in a downtrend but is finding a hell of a lot of buying pressure underneath. The 50 Day EMA is sitting at the $115 level and breaking lower, so that might be the first target for the bulls.
If we can break above the 50 Day EMA, then the next target could very well be $135, where we had made a significant hi back in March. Regardless, it looks as if you probably have quite a bit of time to build up a position, as this is either pressure that is going to break the whole market down, or it is possible that we are in the midst of an accumulation phase. This is when larger money comes in and starts to pick up the asset, waiting for everybody else to jump in and push it higher.
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