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Bitcoin‘s (BTC) recent terrifying price drop has not yet had a clear underlying cause. However, the drop to $25,000 triggered a major sell-off in the market, including Litecoin (LTC), leading to a partial recovery towards $65 before falling below $60 at the time of writing.
BTC was trading at $26,000 at the time of writing. However, it violated a key trendline support, strengthening expectations of a larger drop for the leading cryptocurrency. According to Coinglass, the crypto crash led to over $1 billion in position liquidation in the last 24 hours prior to the time of writing.
Litecoin Price
The Fibonacci retracement tool (yellow) is drawn between the highest level in July and the recent lowest level. The long wick below indicates that sellers gained momentum, but buyers stepped in to prevent further decline. At the time of writing, LTC was trading at $65, which corresponds to the lowest level in March.
On-Balance Volume (OBV) declined as it captured the decrease in demand for the asset. Similarly, the Relative Strength Index (RSI) remained in oversold territory and did not show any signs of reversal in the near future. Therefore, if BTC does not experience further losses, LTC could consolidate its losses between $56 and $70 in the next few hours/days.
Although a move above $70 could indicate bullish intentions, bulls may only gain an advantage above $75 for now. $70 and $78.5 are the key resistance levels, while $50.5 and $42 serve as key support levels.
The Future of Litecoin
Any quick urge to accumulate LTC at low prices has been highly discouraging. According to Coinglass’ liquidation data, over $300,000 worth of long positions evaporated in the last four hours prior to the time of writing.
Before that, $16 million worth of long positions had also been liquidated. The incredible price drop in Bitcoin caught risk-loving investors off guard and caused them to lose their money. The short-term bearish trend requires caution from bulls and monitoring of BTC movements.
