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/USDT -1d Chart

LTC Price 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.

LTC Supply Distribution | Santiment

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.

The post Why Litecoin Price May Crash to Sub $50 Levels? appeared first on CoinGape.

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Filed under: News - @ August 27, 2024 8:25 pm