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Highlights
- The sudden liquidation of 45.2K wallets suggests smaller investors are exiting, which could pave the way for long-term investors and a potential recovery.
- Litecoin price set for a 20% drop before challenging the long-term support of the triangle pattern.
- A downsloping trendline drives a current correction trend in LTC.
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.
Frequently Asked Questions (FAQs)
1. Why might Litecoin crash to sub-$50 levels?
2. What is causing the current bearish trend in Litecoin?
3. What are the key levels to watch for a potential Litecoin recovery?
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