LTCUSD previously broke below a short-term descending triangle pattern but zoomed right back up for an upside break of a longer-term triangle. Price moved past the resistance of its symmetrical triangle formation on the 4-hour time frame, signaling further gains in the cards.
The chart pattern is approximately $50 tall so the resulting rally could be of the same size. However, the moving averages are still oscillating to signal more consolidation. An upward crossover could confirm that a longer-term uptrend would continue.
Stochastic is already around overbought levels, which reflects exhaustion among buyers. RSI is also turning lower from the overbought zone to indicate that selling pressure would return. This could spur a pullback to the broken triangle resistance before the uptrend resumes.
LTCUSD appeared to take its cue from the bitcoin surge after the hard fork was suspended. According to the email from the proponents of the network upgrade to SegWit2x, they are seeing divided views from the community leading up to the hard fork and that this is not bitcoin’s goal.
Apart from that, the dollar is on weak footing because of setbacks to the tax plan. Senate is reportedly gearing up to unveil their version of the tax bill today and stark differences in key points are expected, which would make the approval process more complex later on. Meanwhile, Congress is set to vote on their version of the proposal by next week.
There have also been talks of Senate imposing a one-year delay before implementing tax cuts to ensure that these comply with Senate rules. Further headwinds could keep a lid on dollar gains while cryptocurrencies and other higher-yielding assets take advantage.
As for litecoin itself, there has been a reported spike in volumes from South Korea, reflecting increasing interest for this particular cryptocurrency. The decision by South Korean exchange Coinone’s decision to add LTC to its platform is being seen as the main reason for the spike in prices.