The U.S. Securities and Exchange Commission’s (SEC) lawsuit against Binance for alleged securities law violations sent the market into a deep correction. The lawsuit, filed in March, classified Litecoin (LTC), Ethereum (ETH), Bitcoin (BTC), and Binance USD (BUSD) as commodities.
While the SEC’s latest filing is similar to the previous Commodity Futures Trading Commission (CFTC) submission, LTC was not mentioned as a security. Conversely, MATIC, SOL, ADA, and others were selected as securities. LTC lost 6% of its value in the last 24 hours and traded at $87.5 at press time. Similarly, BTC fell below $26,000 as investors reacted to the news.
Current Situation of LTC Price
Amidst a weak BTC and the mid-June Federal Open Market Committee (FOMC) meeting, LTC could reverse its May gains if the sellers intensify their control. Notably, the Relative Strength Index (RSI) receded to the oversold region, indicating increased selling pressure.
Therefore, LTC could breach the $84 support level and fall into the $74-78 (teal) demand zone. This demand zone also coincides with a bullish order block (OB) formed on the 4-hour chart on March 13.
Looking at the upside, if the $84 support holds, a recovery attempt could be possible. Notably, the Accumulation/Distribution indicator has steadily risen since the end of May, highlighting an accumulation trend.
Thus, LTC could surpass the $89 hurdle and potentially retest $95, especially if BTC recaptures $27,000. Moreover, at the time of writing, the weekly chart is still in an uptrend despite reverting to a near-neutral position.
What Are LTC Investors Doing?
In the 4-hour timeframe, LTC saw over $80,000 of long positions liquidated, compared to approximately $20,000 of short positions. This means the liquidation of long positions is four times greater than short positions, reiterating a short-term bearish outlook for LTC in the futures market.
The potential interest rate hike by the Fed next week could complicate a robust recovery for LTC bulls. Therefore, it could be crucial to follow BTC‘s movements before proceeding.
