Litecoin grapples with ‘double top’ risks after LTC price rallies 37% in November

A 37% November price rally in Litecoin (LTC) risks exhaustion as the “silver cryptocurrency” hints at forming a double top chart pattern.

The classic bearish reversal setup appears when the price forms two consecutive peaks of almost the same height, with each upside move meeting with a strong correction toward a common support level, called the “neckline.”

Typically, the price breaks below the support and falls by as much as the maximum height between the double top’s peak and neckline.

So it appears, Litecoin is halfway through forming a double top pattern, as shown in the chart below.

In detail, LTC’s price peaked out on Nov. 10 near $295.50 — the first top — before correcting lower toward the neckline support of around $249. That followed up with a rebound to $280 — the second top — eventually attracting profit-takers to cause a minor correction, which is still underway.

Litecoin would need to extend its selloff to retest the neckline. Meanwhile, breaking below the support level would activate the double top breakout setup, with the profit target sitting near $200.

The Bitcoin correlation

Litecoin’s bearish reversal pattern is emerging when inflation in the United States has surged to a three-decade high, prompting investors to seek a hedge across various financial instruments.

For instance, the most actively traded gold futures lately posted to its best week in six months, jumping 2.9% to $1,868.50 per troy ounce, after the U.S. Labor Department reported an increase in the consumer price index (CPI) by 6.2% year-over-year. That marked the fifth-straight month of inflation above 5%.

Many investors and/or traders turned to Bitcoin (BTC) after perceiving it as a safety net against rising inflation, noted Wilfred Daye, head of Securitize Capital — the asset-management arm of Securitize Inc — admitting that people have picked the cryptocurrency as a hedge despite its concerning price volatility.

“We don’t have long enough history to assert Bitcoin is indeed an inflation hedge,” Daye said, adding:

“I would argue that gold is a better inflation hedge still. But Bitcoin as an inflation hedge is a new sexy concept — people love new ideas.”

Bitcoin’s growth has also helped altcoins rise in tandem thanks to its broader influence across the crypto market. Litecoin has been one of the beneficiaries of the rally, with its one-year correlation…