Cryptocurrencies stopped falling in January and are trying to resume the larger uptrend, although it’s not that simple. The bearish momentum of previous months has come to an end and most cryptos have made respectable gains over the past month, with Bitcoin (BTC) surging from $33,000 to over $48,000, suggesting that the uptrend wider may have resumed.
But this week we are seeing a pullback, although it is not certain if this is just a pullback before bullish momentum resumes or if it is a bearish reversal. Litecoin (LTC) and Cardano (ADA) both face moving averages below, which will be the bullish/bearish test.
Cardano Daily Chart Analysis – Will the 100 SMA Turn into Support for ADA?
ADA tests the 100 SMA as support
Cardano’s ADA token had been trending lower since September, dropping from around $3.10 to $0.75 during a downward spike, although the actual support is $0.80. Buyers entered the reversal that began mid-last month and pushed ADA/USD above the 50 SMA (yellow), which had acted as resistance. They also pushed above the 100 SMA (green), which also served as resistance once, but now the price has pulled back, so we will see if this moving average will turn into support and sustain the decline.
Cardano released the Alonzo hard fork in September last year, but that didn’t help much with the price. Now, the new upgrades are attracting more investors, although sentiment in the crypto market has also improved. Upgrades to the Plutus smart contract platform by Cardano have increased the limit of script memory units per block of Plutus from 56 million to 62 million. On-chain analysis shows that the number of medium-sized ADA addresses with more than $10,000 has reached an all-time high. Thus, the uptrend should resume once sentiment improves in the market.
Litecoin Daily Chart Analysis – Will LTC Head Towards $100 Again
Can the 50 SMA be used as support for LTC?
Litecoin failed to hit record highs in November, like most cryptocurrencies, and turned bearish at the time. It broke through the $100 level, but that area turned into strong support and last month we saw a bullish reversal, which pushed LTC down to around $133. Litecoin has seen a 100% increase in large transactions as LTC whales continue to accumulate.
This was helping push the price higher and should help it when sentiment in the crypto market turns bullish again. For now, LTC faces the daily yellow 50 (SMA) which acted as resistance during the decline and may now turn into support. If that happens, it could be a good place to buy as Litecoin whales have pushed daily LTC trading volume to a new high. Otherwise, we will wait for the $100 support zone.