LTCUSD has staged a climb strong enough to make it all the way up to the long-term channel resistance around $100. From there, traders quickly booked profits to mark the start of a potential correction to nearby support levels.
Applying the Fibonacci retracement tool on the latest swing low and high shows that the 61.8% level is closest to the channel support and area of interest at $70. Price seems to have already bounced off the 38.2% level, though, and could be ready to revisit or even break past the swing high.
Stochastic is turning lower from the overbought level to signal exhaustion among buyers. If sellers are able to take over, a deeper pullback to the $60 area near the 100 SMA dynamic support could be underway. RSI is also turning lower and showing a bearish divergence from the highs back in September.
LTCUSD has been able to trail bitcoin and other cryptocurrencies in the Thanksgiving rally as the influx of accounts has boosted retail activity and volumes. However, the dollar also put up a good fight upon getting an upgraded GDP for Q3, optimistic remarks from Yellen, and progress in tax reform.
The Senate Budget Committee has approved their version of the tax bill, paving the way for a full vote this week. If all goes well, more gains for the dollar might be in the cards. The core PCE price index is due today, though, and it could turn the spotlight back on weakening inflation expectations that might be dollar bearish.
Geopolitical risk from North Korea has also been positive for LTCUSD so far as cryptocurrencies tend to take their share of safe-haven gains. Traders also tend to seek higher returns in assets outside of traditional markets like stocks and commodities in these cases.
Looking ahead, volatility could still be a big factor for cryptocurrency action as traders now await the launch of CME bitcoin futures, which could open possibilities for other types of digital assets like litecoin.