After a deep pullback during the previous three months, cryptocurrencies have resumed the bullish trend that started late last year. Litecoin crashed lower, losing around 70% of its value during that time, but it reversed higher in July following, the rest of the crypto market.

We can see on the H4 chart, that the price moved above all moving averages, which were acting as resistance during the decline, while after the bullish reversal they turned into support. The 20 SMA (gray) in particular has done a great job as support, pushing the price higher, indicating that the pace of the uptrend has been quite strong for about a month now.

Moving averages have turned into support for Litecoin on the H4 chart

This week we have seen a pullback lower so far, which looks more like profit-taking by traders who bought cryptocurrencies lower. Bitcoin breached the $50,000 level on Monday, but has been retreating lower since then, falling around $3,000, so it seems like traders were targeting that level first and now Bitcoin is retreating lower before the next move higher.

LITECOIN has also been retreating lower in the last few days, after reaching a high of $191 earlier. Now the price has retraced lower, but it seems like the 100 SMA (green) is holding as support on the H4 chart, so we decided to open a buy Litecoin signal. The stochastic indicator is well oversold on this timeframe, which also suggests a bounce higher from here.

Litecoin Live Chart

Large investors with more than $50 million in Bitcoin investments have increased their purchases in August, after the decline in the previous two months. So, the crypto demand is increasing again and Litecoin should reverse higher again soon, hence the buy signal in LTC/USD from us. The 100 SMA was pierced earlier today, but the price has pulled higher above it now, so we might even see a bounce from here soon. Our 2021 Litecoin forecast also points higher, so we are long on this cryptocurrency now.