Litecoin hits fresh 2022 high versus Bitcoin — But will LTC price ‘halve’ before the halving?

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Lite­coin (LTC) has emerged as one of the rare win­ners in the ongo­ing cryp­tocur­ren­cy mar­ket melt­down led by the FTX exchange’s col­lapse.

LTC price outperforms BTC, ET

The 2011-born alt­coin ral­lied near­ly 16% month-to-date (MTD) to reach $62.75 on Nov. 22, out­per­form­ing its top rivals, Bit­coin (BTC) and Ether (ETH), which lo approx­i­mate­ly 25% and 30%, respec­tive­ly, in the same period.

LTC/USD dai­ly price chart. Source: TradingView

Fur­ther­more, the LTC/BTC price also ral­lied to new heights, gain­ing 50% in Novem­ber to estab­lish a new year­ly high of 0.003970 BTC on Nov. 22. 

As Coin­tele­graph report­ed, Lite­coin diverged from the broad­er cryp­tocur­ren­cy mar­ket down­trend ear­li­er this month with its halv­ing slat­ed for August 2023. LTC has also received an endorse­ment from none oth­er than Michael Say­lor for being a Bit­coin-like “dig­i­tal commodity.” 

Nonethe­less, signs of bull­ish exhaus­tion are emerging.

Litecoin price fractal hints at 50% correction

Lite­coin’s ral­ly ver­sus Bit­coin has made the LTC/BTC pai over­val­ued, accord­ing to its week­ly rel­a­tive strength index (RSI) reading.

Notably, LTC/BTC’s week­ly RSI, which mea­sures the pair’s speed and change of price move­ments, surged above 70 on Nov. 22. An RSI read­ing above 70 is con­sid­ered over­bought, which many tra­di­tion­al ana­lysts see as a sign of an impend­ing bear­ish reversal.

His­tor­i­cal­ly, Lite­coin’s over­bought RSI read­ings ver­sus Bit­coin have been fol­lowed by major price cor­rec­tions. For instance, in April 2021, the LTC/BTC RSI’s climb above 70 met with a strong sell­off reac­tion, even­tu­al­ly push­ing the pair down by 75% to 0.001716 BTC by June 2022.

Sim­i­lar­ly, an over­bought RSI in April 2019 led to a 70% LTC/BTC price cor­rec­tion by Decem­ber 2019. 

The same RSI frac­tal now hints at Lite­coin’s pos­si­bil­i­ty of under­go­ing a 50% wipe­out ver­sus Bit­coin if cou­pled with LTC/BTC’s mul­ti-year descend­ing chan­nel pat­tern, as shown below.

LTC/BTC week­ly price chart. Source: TradingView

TypicalLTC/BTC turns over­bought after hit­ting the chan­nel’s upper trend­line, which fol­lows up with a cor­rec­tion toward the low­er trendline. 

As a result, the pair risks a drop to or below 0.001797 BTC by Decem­ber 2022 if the frac­tal repeats, down more than 50% from the cur­rent price levels. 

Con­verse­ly, a deci­sive break­out above the upper trend­line could have LTC/BTC test its 200-week expo­nen­tial mov­ing aver­age (200-week EMA; the blue wave) at 0.005319 BTC, up 30% from cur­rent price lev­els, as the next upside target.

LTC/USD pair “bear flag” 

Lite­coin eyes a sim­i­lar price crash ver­sus the U.S. dol­lar as it paints a bear flag pat­tern on the week­ly charts.

Relat­ed: Cathie Wood’s ARK Invest adds more Bit­coin expo­sure as GBTC, Coin­base stock hit new lows

Bear flags are bear­ish con­tin­u­a­tion pat­terns that appear when the price con­sol­i­dates high­er inside a par­al­lel, ascend­ing chan­nel range after a strong move low­er (called flag­pole). They resolve after the price breaks below the low­er trend­line and falls by as much as the flag­pole’s height.

LTC/USD week­ly price chart. Source: TradingView

LTC has been trad­ing inside the bear flag range, eye­ing a break­down below its low­er trend­line sup­port of around $55. The bear flag down­side tar­get is around $32.40 if it breaks deci­sive­ly below the said support.

In oth­er words, a 50% decline by Decem­ber 2022.

This arti­cle does not con­tain invest­ment advice or rec­om­men­da­tions. Every invest­ment and trad­ing move involves risk, and read­ers should con­duct their own research when mak­ing a decision. 

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