Cryptocurrencies stopped declining in January and are trying to resume the larger uptrend, although that is not so straightforward. The bearish momentum of previous months has ended and most cryptos made some respectable gains over the last month, with Bitcoin (BTC) increasing above $48,000 from $33,000, which suggested that perhaps the larger bullish trend has resumed.
But this week we are seeing a pullback, although it’s not certain whether this is just a pullback before the bullish momentum resumes or if it is a bearish reversal. Litecoin (LTC) and Cardano (ADA) are both facing moving averages below, which will be the bullish/bearish test.
Cardano Daily Chart Analysis – Will the 100 SMA Turn Into Support for ADA?
ADA testing the 100 SMA as support
Cardano’s ADA token was on a downtrend since September, reversing from around $3.10 to $0.75 during a spike lower, although the real support came at $0.80. Buyers started the reversal started by the middle of last month and pushed ADA/USD above the 50 SMA (yellow), which had been acting as resistance. They pushed above the 100 SMA (green) as well, which also acted as resistance once but now the price has pulled back down, so we will see if this moving average will turn into support and hold the decline.
Cardano released the Alonzo hard fork in September last year, but it didn’t help much with the price. Now, the new upgrades are attracting more investors, although the sentiment in the crypto market has improved as well. The Plutus smart-contract platform upgrades by Cardano, increased the limit on Plutus’ per block script memory units from 56 million to 62 million. On-chain analysis shows that the number of mid-size ADA addresses with more than $10k has reached an all-time high. So, the bullish trend should resume again once the sentiment improves in the market.
Litecoin Daily Chart Analysis – Will LTC Head to $100 Again
Can the 50 SMA hold as support for LTC?
Litecoin failed to make record highs in November as most of the cryptocurrencies did and turned bearish back then. It pierced the $100 level but that zone turned into solid support and last month we saw a bullish reversal, which pushed LTC to around $133. Litecoin saw a 100% increase in large transactions as LTC whales keep accumulating.
That was helping push the price higher and should help it when the sentiment in the crypto market turns bullish again. For now, LTC is facing the 50 daily (SMA) yellow which has been acting as resistance during the decline and might turn into support now. If that happens, then this might be a good place to buy since Litecoin whales have pushed the daily volume of LTC transactions to a new high. Otherwise, we will wait for the $100 support zone.