LTC/USD:Price: 9,320 sats | MCAP: 585,069 BTC | Maximum Gain: +5.7%
Why we were intrigued:
Bitcoin dived below $10,000 on July 16, opening doors for a recovery in alternative cryptocurrencies.
Litecoin, in particular, looked poised for a bounce on July 16 with the daily chart flashing a bullish divergence of the moving average convergence divergence histogram (MACD) .
Further, on July 17, the hourly chart reported a bullish divergence of the relative strength index. Note that early signs of a trend reversal like the bullish divergence of the RSI or MACD gain credence only when the price is showing signs of seller exhaustion.
LTC created a bullish hammer on July 16, which occurs when the day begins with sellers in control buy ends with a victory for the bulls. The bullish hammer is widely considered a sign of seller exhaustion or an early sign of bullish reversal if it appears following a prolonged sell-off.
That was the case here. The bullish hammer was charted following a four-week drop from 18,000 sats to 8,000 sats.
With stage set for a recovery rally, our analyst recommended a buy trade in LTC/BTC in the European trading hours on July 17 when prices were trading at 8,514 sats. As expected, the cryptocurrency rose achieved the target of 9,000 sats on the same day and further extended gains 9946 on July 18.
As of writing, LTC/BTC is trading at 9,320 on Binance. On the daily chart, the MACD has crossed into bullish territory above zero and the RSI has bounced up from oversold levels. Also, the move higher seen this week is backed by an uptick in buying volumes.
So, it won’t be a surprise if LTC/BTC outperforms its peers next week. Note that the fourth-largest cryptocurrency is set to undergo mining reward halving on Aug. 5