- Litecoin trades near $112 while analysts confirm the ABC correction is complete and bullish divergence is forming.
- RSI at 47.91 shows strength as price divergence patterns signal limited downside and possible rebound near $120.
- LTC buyers watch $112 support since holding above this level could open gains toward $120 and later $128.
Litecoin (LTC) is displaying signs of a potential rebound, with analysts pointing to a regular bullish divergence and the completion of an ABC corrective pattern. Current signals highlight favorable risk-to-reward conditions for a possible buy opportunity.
Technical Setup Suggests Recovery
Litecoin is trading around $112.36, with market data indicating price stability following a correction from recent highs above $128. The chart shows a completed ABC correction, a common technical structure often preceding trend reversals.
Indicators highlight a bullish divergence between price action and the Relative Strength Index (RSI). While prices reached lower lows, the RSI printed higher lows near 47.91, suggesting weakening bearish momentum. This divergence typically indicates a potential upside reversal.
Analyst Matthew Dixon described the setup as supportive of long positions. The presence of both hidden bullish divergence and a regular bullish divergence strengthens the technical case. These signals suggest that downside risks may be limited as buyers gradually step in.
Divergence Patterns Drive Interest
The chart highlights earlier periods of regular bearish divergence when Litecoin traded above $130. During that phase, RSI showed weakening momentum while prices continued climbing, often a precursor to corrections. The current reversal pattern follows this cycle.
The hidden bullish divergence, shown in blue, emerged as price formed higher lows despite RSI showing lower lows. Such patterns often appear during consolidation before an upward continuation. The regular bullish divergence visible now provides further confirmation.
Together, these divergences outline an improved technical landscape for Litecoin. Market participants often rely on these signals when identifying entry points. The combined strength of multiple divergence patterns adds credibility to bullish scenarios.
Can LTC Build Momentum Above $112?
The pivotal question is whether Litecoin can sustain momentum above $112 and convert this technical setup into a meaningful rally. If buyers maintain pressure, price targets could align with recent highs near $120 and potentially retest $128.
The ABC correction suggests consolidation may already be complete. Traders view this as a sign that price could attempt new advances. A break above $115 would likely attract increased interest from momentum traders.
However, failure to maintain above $112 could expose Litecoin to downside tests near $108 and possibly $100. Risk levels remain defined, allowing traders to weigh positions with clearer expectations. With RSI near mid-range, the market retains flexibility for either outcome.
As LTC positions itself after the correction, investor attention centers on whether bullish divergences can fuel a stronger recovery. Can Litecoin capitalize on this technical foundation to reclaim higher price levels?
