The Litecoin market rallied a bit during the trading session on Monday to break above the $125 level initially. However, the market has given back quite a bit of the gain to show signs of exhaustion and hesitation, as we have pulled back to the 50 Day EMA. The $120 level underneath continues to offer support, and if we were to break down below that level, then it is possible that we could go looking toward the $100 level over the longer term. We are at the precipice and will have to make a decision on bigger moves to the upside or the down.
Breaking down below the hammer from the Friday session would of course be a very negative sign, which would not only clear short-term support, but would also clear the $120 level. At that point, a certain amount of psychology would more likely than not come into the picture, sending this market lower, perhaps pushing it all the way down to the $100 level. This would more likely than not be influenced from the outside, with the Bitcoin market leading the way for the rest of crypto.
Alternately, if the market were to break above the highs of last week, then Litecoin could go as high as $140 above, perhaps even the 200 Day EMA which currently sits at the $147.35 level. The 200 Day EMA of course is an indicator that a lot of people pay close attention to, and therefore breaking above that would be a very bullish sign. In fact, it would technically be the beginning of a new uptrend by almost all accounts, and therefore it makes sense that we would see the market go much higher at that point. However, you need to make sure Bitcoin is doing the same thing, as it gives us the overall attitude of crypto markets in general.
It is very likely that you need to simply wait for some type of impulsive breakout or break down, and then simply follow going forward. The market has been in a downtrend for a while, but you can also make an argument for the $100 level as being psychologically and structurally important, and an area where we are trying to form some type of longer-term bottom.