The Litecoin price nosedived to the lowest level since May 1 as a sea of red dominated the cryptocurrency and stock market. LTC declined to a low of $94.77, which was substantially lower than this week’s high of $107. As a result, the coin’s market cap has fallen to about $6.8 billion, making it the 24th biggest coin globally.
Investors are getting afraid of the new normal. For example, the closely-watched CNN fear and greed index has dropped to the fear zone of 31, which is the lowest it has been in days. At the same time, the Bitcoin fear and greed index has fallen to the extreme fear level of 22. This is a sign that investors are afraid and are increasingly selling their stock and cryptocurrencies as the Fed tightens liquidity.
The hawkish Federal Reserve is the main reason why cryptocurrency prices have declined sharply in the past few days. However, a closer look at on-chain data shows that many Litecoin holders have decided to exit their holdings while mining activity has been falling lately. Now, with many LTC holders in the red, there is a likelihood that the coin will keep falling in the near term.
The four-hour chart shows that the LTC price has been in a strong bearish trend in the past few months. This sell-off accelerated on Thursday as most digital coins plummeted. As a result, it has moved below all moving averages, while the Relative Strength Index (RSI) has moved below the neutral point at 50.
A closer look shows that the coin is approaching the important support level at $94, which was the lowest level on April 30th. It has also moved below the 25-day moving average. Therefore, we can say that the coin is a bit safe as long as it is above the important level of $94. A drop below that level will signal that bears have prevailed.
This post was last modified on May 06, 2022, 07:48 BST 07:48