Technical and on-chain analysis of Litecoin: Bullish indicators emerge as the price consolidates

The price of Litecoin (LTC) is currently in a consolidation phase within a falling wedge pattern around $112.5, according to recent data. A detailed analysis of technical and on-chain indicators suggests an increasing probability of a bullish move in the short term.

On-chain analysis shows an increase in network activity

The on-chain data of Litecoin reveals a notable increase in network activity:

• The fee revenue from Litecoin reached a 7-month high, increasing from $1,000 on Saturday to $2,100 on Monday.
• This increase in fees indicates a growing interest from traders and greater liquidity on the LTC chain.
• The hash rate of LTC has tripled in the last 18 months, indicating greater network security and miner confidence.

Derivatives indicators show bullish sentiment

Derivatives data also support a bullish outlook for Litecoin:

• The long/short ratio of LTC is currently at 1.11, the highest level in over a month.
• This data suggests that traders are betting on an increase in the asset's price.

Technical analysis indicates possible bullish breakout

From a technical perspective, Litecoin shows signs of a potential bullish movement:

• The price of LTC is within a falling wedge pattern formed since early August.
• A breakout from this pattern generally favors the bulls.
• LTC found support near its 100-day EMA at $106.13 on Monday, recovering 4% over the next two days.
• At the time of this analysis, LTC is trading around $112.54.

Key levels to watch

• Key resistance: A breakout above the upper limit of the falling wedge pattern could extend the rally towards the high of August 14 at $134.29.
• Key support: In the event of a correction, LTC could find support near its 100-day EMA at $106.13.

Technical indicators show bullish momentum

• The Relative Strength Index (RSI) on the daily chart is at 48, approaching its neutral level of 50, which indicates a decrease in bearish momentum.
• The lines of the Moving Average Convergence Divergence indicator (MACD) are coming closer together with decreasing red histogram bars, suggesting that a bullish crossover could occur in the coming sessions.

This technical and on-chain analysis suggests that Litecoin might be preparing for a bullish move in the short term. However, investors should maintain proper risk management and conduct their own research before making investment decisions.