Litecoin Bear Flag Could Cause 41% Crash To This Level, Analyst Explains
05 January 2024 - 5:00AM
NEWSBTC
An analyst has explained that a bear flag is potentially forming
for Litecoin, which, if confirmed, might cause a decline for LTC to
this level. Litecoin Could Be In Danger Of Deep Decline Due To This
Bear Flag In a post on X, analyst Ali has pointed out a possible
bear flag taking form for Litecoin. A “bear flag” is a pattern in
technical analysis that, as its name implies, looks like a flag on
a pole. The pattern takes shape when the asset observes a sharp
downward move and follows it up with a period of consolidation.
This consolidation happens toward a slight overall uptrend, meaning
that its upper level is created by connecting higher highs, while
the lower line joins together higher lows. Related Reading: Crypto
Futures Razed To Ground As $659 Million Rekt With Bitcoin Crash The
downtrend prior to the consolidation makes up for the pole, while
the channel looks like a flag. Inside the flag, the price is
naturally likely to feel resistance at the upper level, while
support is at the lower one. The bear flag is popularly considered
a continuation pattern, meaning that the downtrend would continue
after the pattern forms. This continuation happens as the price
finally ends its consolidation and crashes through the lower level
of the flag. Like the bear flag, there is also the “bull flag,”
which forms in the opposite circumstances. In the case of this
pattern, the price breaks out with a sharp upward move after the
consolidation period toward the downside finishes. Now, here is the
chart shared by the analyst that sheds light on a possible bear
flag forming in the 3-day price of Litecoin: The pattern currently
forming in the 3-day price of the cryptocurrency | Source:
@ali_charts on X From the graph, it’s visible that Litecoin’s 3-day
price has possibly been consolidating inside a bear flag during the
last few months. With the latest crash in the asset, though, the
price appears to finally be breaking out of the pattern towards the
down direction. This plunge in the coin has occurred as the rest of
the cryptocurrency sector has also reverberated with a crash.
Unlike many other assets, however, LTC never enjoyed any sharp
rally to kickstart the year, so the plummet has been especially
damaging for it. “Post-recent dip, the outlook for Litecoin appears
challenging,” notes Ali. “If the selling pressure continues, LTC
might see a push down to $38, potentially confirming a bear flag
formation.” Related Reading: Bitcoin Plunges Below Support As Price
Crashes To $42,500 Generally, breakouts from any flag pattern are
of about the same length as the preceding pole, which is why the
analyst has selected this target. If Litecoin’s potential drawdown
does play out in this fashion, then the asset would have seen a
decrease of more than 41% from the current price levels. LTC Price
Litecoin had been floating above the $73 mark just earlier, but
following this 11% crash, the coin is now down to just $65. Looks
like the price of the coin has been moving sideways since the
plunge | Source: LTCUSD on TradingView Featured image from
Kanchanara on Unsplash.com, charts from TradingView.com
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