The Litecoin (LTC) price is down for the second consecutive day as the crypto sell-off gains steam. The LTC is trading at $155.76, which is 33% below the highest level on May 20. Other cryptocurrencies like Bitcoin, Ethereum, and Cardano have also dropped while the total market cap of all cryptocurrencies tracked by CoinMarketCap has dropped by more than 10% in the past 24 hours.
What happened: Litecoin and Bitcoin have a close relationship in that the two coins were created to do the same thing. They were all built to decentralize the financial industry. Today, Litecoin is used to facilitate transactions in the online and offline space.
According to Litecoin’s founder, most of the people who use the network do so to avoid the high fees and congestion in the Bitcoin ecosystem. Still, most Bitcoins and Litecoins in existence are mostly used as investments, not mediums of exchange.
Like Bitcoin Cash, Litecoin is often used as a proxy for Bitcoin. Many investors who buy LTC do so as a bet on Bitcoin. This is because one Bitcoin can buy almost 200 Litecoins. Therefore, when Bitcoin falls, other coins like Litecoin also decline.
The LTC and BTC are dropping as countries boost their crypto regulations and ahead of the upcoming US inflation data. The numbers are expected to show that the overall consumer price index (CPI) rose by more than 4% in May as commodity prices keeps rising. This means that the Federal Reserve could be forced to move earlier than expected.
The daily chart shows that the LTC price has been under intense pressure in the past few days. The coin remains below the 25-day and 15-day exponential moving averages, which is a sign that bears are still in control. We also see that volume is falling, which is not a bullish factor.
Therefore, the LTC price may keep falling as investors target the next key support at $118, which is about 25% below the current level. On the flip side, a move above $180 will invalidate the bearish view. This prediction is in line with my forecast two weeks ago.
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