Litecoin price is experiencing a pullback after it experienced a quick run-up. The price action prior to the minor rally plays a crucial role in identifying trend reversals; currently, it hints at a bullish outlook for LTC.
Litecoin price to recover its gains
Litecoin price set up a range, extending from $153.90 to $96.39 between January 17 and 22. Soon after the swing low was set on January 22, LTC rallied 48% and set up another range, stretching from $144 to $91.61.
The February 24 market trough at $91.61 sliced through the previous swing low, creating a market structure break (MSB) and suggesting that LTC could decline further. However, the MSB was a liquidity grab and a manipulation technique used by market makers to lure traders in the wrong direction before heading higher.
After the MSB, Litecoin price rallied 25% and is currently retracing to find stable support levels before triggering the second move up. Interested investors can enter a long position at the current position – $102.77 and expect it to rally higher.
The first hurdle Litecoin price will encounter is the 50% retracement level at $117.80; beyond this, LTC will take a swing at the 62% retracement level at $124.09, bringing the total run-up to 20%. Investors can choose to take profits at either of these levels.
LTC/USDT 4-hour chart
On the contrary, if Litecoin price fails to curb profit-taking, the retracement could push LTC to retest the January 22 swing low at $96.39. If the bulls fail to absorb the selling pressure, there is a good chance LTC might retest the range low at $91.61.
A four-hour candlestick close below $91.61 will create a lower low and invalidate the bullish thesis for Litecoin price. This move could open the path for bears to drag LTC to lower levels.