Litecoin (LTC) has emerged as one of the rare winners in the ongoing cryptocurrency market crash caused by the collapse of the FTX exchange.

LTC price outperforms BTC and ET

The 2011 altcoin is up nearly 16% month-to-date (MTD) to $62.75 on Nov. 25% and 30% over the same period.

LTC/USD daily chart. Source: TradingView

Additionally, the LTC/BTC price also rose to new highs, rising 50% in November to hit a new yearly high of 0.003970 BTC on November 22.

As Cointelegraph reported, Litecoin broke away from a broader cryptocurrency market downtrend earlier this month ahead of its halving, which is scheduled for August 2023. LTC also received endorsement From Michael Saylor, as it is a Bitcoin-like “digital commodity”.

Still, signs of bullish exhaustion are emerging.

Litecoin Price Fractal Hints at 50% Correction

Litecoin’s rally against Bitcoin makes the LTC/BTC pai overvalued, according to its weekly relative strength index (RSI) reading.

Notably, LTC/BTC’s weekly RSI, which measures the pair’s velocity and price movement, surged above 70 on Nov. 22. An RSI reading above 70 is considered overbought, and many traditional analysts see it as a sign of an impending bearish reversal.

Historically, overbought RSI readings for Litecoin relative to Bitcoin have been followed by major price corrections. For example, in April 2021, when the LTC/BTC RSI climbed above 70, it was met with a strong selling reaction, eventually causing the pair to fall by 75% to 0.001716 BTC by June 2022.

Likewise, the overbought RSI in April 2019 resulted in a 70% correction in LTC/BTC price by December 2019.

The same RSI fractal now suggests that Litecoin has the potential to fall 50% against Bitcoin if combined with the LTC/BTC multi-year descending channel pattern, as shown in the chart below.

LTC/BTC weekly price chart. Source: TradingView

Typically LTC/BTC turned overbought after hitting the upper trendline of the channel, followed by a correction to the lower trendline.

Therefore, if the fractal repeats itself, the pair has the potential to drop to or below 0.001797 BTC in December 2022, a drop of over 50% from current price levels.

Conversely, if LTC/BTC breaks decisively above the upper trendline, a test of its 200-week exponential moving average (200-week EMA; blue wave) at 0.005319 BTC, a 30% gain from current price levels, could be the next upside target.

LTC/USD currency pair “bear flag”

Litecoin saw a similar price crash to the U.S. dollar when it drew a bear flag pattern on its weekly chart.

Related: Cathie Wood’s ARK Invest Adds More Bitcoin Exposure as GBTC, Coinbase Stock Hit New Lows

A bear flag is a bearish continuation pattern that occurs when prices consolidate higher within the range of a parallel ascending channel after a strong move lower (known as a flagpole). They resolve after the price breaks below the lower trendline and falls to the height of the flagpole.

LTC/USD weekly price chart. Source: TradingView

LTC has been trading within the range of a bear flag, targeting a break below its lower trendline support around $55. If it breaks decisively below said support, the downside target of the bear flag is around $32.40.

In other words, a 50% drop by December 2022.

This article does not contain investment advice or advice. Every investment and transaction involves risk and readers should do their own research when making a decision.