Relief Rally Ahead? Litecoin Looks Oversold Below $100

Litecoin may have hit fresh 2018 lows Wednesday, but could be in for corrective rally courtesy of oversold conditions.

The sell-off looks overdone as the daily relative strength index has nosedived into oversold territory for the first time in over two months.

LTC could revisit $100 in the short-run before resuming the drop towards $80. Daily chart: RSI. Currently, the RSI is hovering at 26.00, indicating oversold conditions.

Interestingly, LTC is looking oversold at a time when short positions on Bitfinex exchange are at the highest level since Oct. 12.

That said, the broader outlook would still remain bearish as indicated by a pennant breakdown in the long-duration charts below.

LTC closed at $102 last week, signaling a downside break of the pennant - a bearish continuation pattern indicating that the sell-off from the record high of$370 has resumed.

In the long-run LTC will likely test $80.12.

As of writing, LTC is trading well below the 50-day moving average, 100-day MA and 200-day MA, indicating a long-run bearish setup.

View The short-term oversold conditions could pave way for a minor corrective rally to $100 and possibly to $106. The long-run outlook remains bearish, so LTC will likely test $80 over the next few weeks.

Only a weekly close on Sunday above $120 would abort the long-term bearish view.