Litecoin wave 2: will price sweep $70.67 before the next big rally?
Litecoin wave 2 The market is watching Litecoin closely as traders debate whether Litecoin wave 2 has truly finished or still has one more leg lower to complete. From the December low, price has struggled to form a clean five-wave impulse up, which strongly suggests that Litecoin wave 2 is still in progress and may drag price down toward the $70.67 support zone.
Why Litecoin wave 2 matters for traders
When you look at the chart through the lens of Elliott Wave, Litecoin wave 2 is the corrective phase that follows an initial impulse and often shakes out impatient bulls. Because Litecoin wave 2 is typically driven by fear, profit-taking and confusion, it can create some of the best risk-reward entries for swing traders who are willing to buy near support rather than chasing breakouts.
Reading the structure from the December low
Since the December low, price action has been choppy and overlapping, not what you expect from a strong third wave higher. Instead of a powerful trending leg, the move has looked like a corrective bounce, which fits perfectly with the idea that the market is still carving out the final pieces of Litecoin wave 2 before any sustained rally can begin. In this scenario, $70.67 becomes the magnet where Litecoin wave 2 can flush out late buyers, trigger stop-losses and reset sentiment back to extreme pessimism just as smart money quietly accumulates.
Key level: why $70.67 is so important
Support levels are not magic, but the way traders behave around them can define the next big trend. At $70.67 you have previous demand, a cluster of recent lows and a logical area where Litecoin wave 2 could exhaust its selling pressure. If price spikes below that level briefly and then snaps back up, it would be classic wave-2 behavior: maximum frustration followed by a sudden reversal.
For many traders, the most practical plan is not to predict the exact bottom of Litecoin wave 2 but to prepare scenarios. You can decide in advance how you will react if price tags $70.67, how much capital you are willing to risk and where your invalidation level sits if Litecoin wave 2 breaks down much deeper than expected.
Bullish roadmap after Litecoin wave 2 completes
If $70.67 holds and price begins to push away from that zone with rising volume, it becomes reasonable to assume that Litecoin wave 2 is complete and a new impulsive advance is starting. In Elliott Wave terms, that would likely mark the start of wave 3, which is usually the strongest and longest leg of a trend, and traders who positioned thoughtfully during Litecoin wave 2 could be rewarded with outsized upside.
Once the market exits Litecoin wave 2, the character of the chart should change visibly. Pullbacks should become shallower, breakouts should see more follow-through, and momentum indicators should show stronger bullish readings rather than the hesitant signals we have seen during the correction.
Risk management and invalidation levels
No trading idea is complete without a clear definition of risk. Even if you believe the correction is close to finishing, price can always overshoot support, so your position size and stop-loss placement need to reflect that uncertainty. Some traders will place their hard stop slightly below the December low, while others may use a wider structure based on higher-time-frame support and overall account risk.
What matters most is consistency. If the market slices below $70.67 and fails to reclaim it, that is strong evidence that the current wave count is wrong or incomplete. At that point, it makes more sense to step aside, protect capital and wait for a cleaner setup than to cling stubbornly to an outdated scenario. Surviving the bad trades is what keeps you in the game long enough to benefit when the market finally moves in your favor.
How broader crypto sentiment can influence this wave
Litecoin rarely moves in isolation. Aggressive selling in Bitcoin or a sudden shift to risk-off sentiment across the crypto market can accelerate any ongoing correction and push prices through levels that seemed solid just days earlier. On the flip side, a strong bounce in majors often lifts large-cap altcoins together, turning what looked like a breakdown into a higher low on the chart.
For this reason, it helps to watch dominance charts, funding rates and overall liquidity conditions while you focus on the structure of this wave. If broader sentiment improves just as price is testing support, the odds of a meaningful reversal increase. If fear spikes and liquidity dries up, downside wicks can extend far beyond what the pattern alone might have suggested.
Common mistakes when trading this phase
One of the biggest errors newer traders make is entering too early with oversized positions. They see a small bounce off support and assume the low is already in, piling in with leverage only to be wiped out by one more sharp drop. A safer approach is to accept that catching the exact bottom is almost impossible and instead scale in gradually, leaving room to add if the market still has some downside left.
Another common mistake is ignoring the higher time frame. On a five-minute or fifteen-minute chart, every swing can feel like a major reversal, but the daily structure may still show nothing more than a normal retracement. By anchoring your analysis to the larger trend and then drilling down, you can avoid treating every fluctuation as a life-or-death signal and focus on the moves that really matter.
Turning analysis into a trading plan
All the chart reading in the world is useless without a concrete plan. Before price ever touches $70.67, you can write down your entry zones, target areas and invalidation levels, along with the percentage of your capital you are prepared to allocate. That way, decisions are made calmly and logically, not in the heat of the moment when candles are moving fast.
A simple template can help: identify the key support area, define a first profit-taking zone near recent swing highs, and choose a secondary target in case the next impulse leg turns into a much larger trend. Combine that with a maximum loss per trade, and you have a structured approach instead of a random gamble. Remember that this article is for educational purposes only and does not constitute financial advice; always do your own research and consult a professional if needed.
Final thoughts
Technical patterns are a useful map, but the market is under no obligation to follow them perfectly. Treat any scenario as a working hypothesis that is constantly updated as new price information arrives. If conditions change, your plan should be flexible enough to change with them rather than locking you into one rigid narrative.
The traders who tend to succeed over the long run are not the ones who predict every move, but the ones who manage risk, stay patient and keep their emotions under control. By combining disciplined planning with a clear understanding of the current corrective phase, you give yourself a better chance of being on the right side of the next big move, whether that involves a sharp reversal higher from support or a deeper washout that creates an even more attractive opportunity.