Resistance Rejection Sparks Bearish Wave in Litecoin

• Litecoin (LTC) is expected to take a nosedive to $83 as analysts spot a bearish formation on its price chart. 
• Breaking above the $96 level could also lead to a “smooth ride” to $100 and subsequently to $107. 

Litecoin (LTC), one of the most undervalued digital assets, has shown the formation of a “classic dead-cat bounce pattern” as it prints losses across four of the five major trading sessions.

According to our market data, the asset failed to break into the $90 resistance level, declining by 2% in the last 24 hours, 12% in the last 30 days, 0.12% in the last 90 days, and 14.2% from year to date. Conversely, Litecoin has managed to record a 2% gain on its weekly price chart to trade at $89.

Looking into its historical chart, we found that Litecoin had been making some notable runs before closing below the ascending trendline and the 200-day Exponential Moving Average at $93.30 on May 30.

On June 5, Litecoin recorded an 8% decline. From this level, the asset recorded some gains before facing a huge rejection at $93 to fall below $90. Prior to this, CNF had reported the significant surge in Litecoin inflows on various exchanges, with Coinbase recording $1.72 million. As indicated in our earlier discussion, Binance and Bybit also had $532k and $394k, respectively.

More About the Litecoin (LTC) Price Analysis

Amidst the backdrop of this, traders are reported to be seeking to short Litecoin between an entry range of $93 and $95. Already, the short position in the derivative market is almost reaching its highest in months. Confirming this, Coinglass data disclosed that the long-to-short ratio of Litecoin is currently around 0.82. Technically, a ratio of below 1 signals a bearish sentiment with more traders anticipating a price decline.

In the short term, analysts believe that the asset could decline to $83 if it fails to hold above the current support level. A continued bearish bet by traders could force the price to find a resort at $77. Based on the price action during the early June corrections, Litecoin could rely strongly on $86.66, $85.96, and $82.01 for support.

Closing above the weekly resistance level at $96 could also see Litecoin reach the $107 level. However, this would be a very tough battle as approximately 204,000 addresses have purchased 6.83 million LTC within the $92 and $95 range. As explained in our last analysis, breaking this range could send the price to $100 before targeting $107.

For now, its Relative Strength Index (RSI) is hovering around the neutral zone of 50. However, multiple analysts have expressed their confidence in the asset breaking the trend to enter the bullish zone. As reviewed in our recent publication, an analyst called Poseidon has predicted that the asset could hit $300.

Multiple analysts have also attributed any future upsurge to positive news surrounding the filed Litecoin Exchange Traded Funds (ETF). As outlined in our recent blog post, the president of ETF Store, Nate Gerarci, has confirmed that the US Securities and Exchange Commission (SEC) has publicly acknowledged these filings.

As we also covered in our latest report, the SEC has delayed the deadlines for decisions on most ETF applications, including the spot Litecoin ETF.

Recommended for you: