Why Litecoin Price May Crash to Sub $50 Levels?

Litecoin price jumped 1% to $63.7 during U.S. trading on Tuesday despite a general pullback in the crypto market. The bearish turnaround for most major altcoins showed a lack of momentum, indicating a temporary drop for buyers to stabilize from last week’s rally. However, the LTC price rebound could be linked to the sudden capitulation of short holders, a signal often interpreted as a potential recovery.

Litecoin Price Set to Challenge Multi-Year Support

The Litecoin price witnessed a steady correction for the past five months under the influence of a downsloping trendline. The bearish turnaround has tumbled the asset from $112.8 to $63— a 45% decrease, while the market cap plunges to $4.77 Billion.

The overhead trendline and 50-day Exponential moving average provided dynamic resistance against LTC buyers, indicating a sell-on-rally sentiment intact. If the bearish momentum persists, the Litecoin price could plunge 20% to retest the support trendline of the triangle pattern that has been active since December 2018.

The potential retest to lower the trendline would be pivotal for LTC holders. A bearish breakdown below this level will conclude a multi-year consolidation in the bears’ favor if sustained. This support breach would set the initiation Litecoin price prediction target of $40, followed by $25.

LTC Coin Eyes Stability as Small Investors Exit

The LTC price has traded sideways for nearly two weeks, wavering around the $65 level. Despite the consolidation, the market witnessed a sudden liquidation event where 45.2K Litecoin wallets holding between 0.1 to 1 LTC have decreased, suggesting that smaller investors (small fish) are exiting their positions.

However, the exit of smaller or speculative traders is often reflected as a shakeout, which attracts long-term investors. This transition is typically healthy for an asset to drive a stable recovery trend.

Thus, the Litecoin price sparks a major reversal if the bottom support trendline holds. A bullish turnaround followed by a breakout from the overhead trendline will signal renewed bullish momentum and target a $80 high.

✓ Share:

Sahil Mahadik

Sahil is a dedicated full-time trader with over three years of experience in the financial markets. Armed with a strong grasp of technical analysis, he keeps a vigilant eye on the daily price movements of top assets and indices. Drawn by his fascination with financial instruments, Sahil enthusiastically embraced the emerging realm of cryptocurrency, where he continues to explore opportunities driven by his passion for trading

Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.