Litecoin price has had a tough week as investors re-adjusted their Fed expectations following the latest economic data from the United States. LTC crashed to a low of $55.35, which was the lowest level since September 7 of this year. It has fallen by more than 7% from its highest level this month, giving it a market cap of more than $3.99 billion.
Litecoin price has come under intense pressure following the latest American inflation data. The numbers showed that the country’s headline consumer price index (CPI) remained substantially high in August. As a result, some analysts have warned that the Federal Reserve could hike interest rates by 100 basis points when it meets next week.
Others believe that the bank will hike by 0.75% as it did in the past three meetings. All these events have pushed the US dollar index (DXY) to the highest level in over 2 decades.
Litecoin also crashed as investors sold the Ethereum Merge event. Historically, investors buy assets towards a major event and then exit after the event happens. As such, Ethereum price surged to over $1,700 before the merge and then dropped after it happened. Ethereum has crashed to $1,475 while BTC crashed to $19,770. ETH and LTC have a close correlation.
The four-hour chart shows that the LTC price has been in a strong bearish trend in the past few weeks. In this period, the coin has crashed below all moving averages and moved below the support at $62.78. The Awesome Oscillator has also moved below the neutral point. The momentum indicator has also continued falling.
Therefore, there is a likelihood that Litecoin price will continue falling as sellers target the next key support level at $51.77, which was the lowest level in August. A move above the resistance at $55 will invalidate the bearish view.
This post was last modified on Sep 16, 2022, 08:50 BST 08:50