Litecoin’s (LTC) price and investors have calmed down due to a 30% drop observed at the beginning of April. However, before the altcoin can recover, investors might be choosing a different downward path.
Downward Momentum in LTC
The popular altcoin Litecoin’s price is struggling to recover after the correction at the beginning of April, as indicated by the lack of profit recorded across the network. Since recovery might take some time, LTC holders might want to exit before their losses increase. This situation can be observed in the market value to realized value (MVRV) ratio, which evaluates the investor’s profit or loss. Litecoin’s 30-day MVRV is currently at 11%, indicating profit and potentially leading to sales. Historically, LTC corrections occur when the MVRV is in the danger zone, known to be between 10% and 24%.
Secondly, the change in investor behavior aligns with market sentiment observable in the relative strength index (RSI). The RSI is a momentum oscillator that measures the speed and change of price movements on a scale of 0 to 100. An RSI above 70 indicates overbought conditions, while an RSI below 30 indicates oversold conditions. Although LTC is not overbought, it is still below the neutral line of 50. Holding this line as a support base can be considered a bullish sign. However, Litecoin may not be suitable for this in the near future.
Price Prediction for LTC
Litecoin’s price is struggling to rise above $90, which could turn the 38.2% Fibonacci retracement into support. However, even worse, LTC has fallen below the 23.6% fib line. This Fib level is known as the bear market support base, and maintaining above it can be considered a bullish sign. However, a drop below this level could signal a decline. If Litecoin’s price follows this path, a drop to $80 could be observed.
However, if broader market signals change and Litecoin’s price starts to rise, it could reclaim the 23.6% fib line as support. This situation could re-trigger the recovery, and surpassing $90 could invalidate the bearish thesis.
