The Litecoin price has gone nowhere in the past few weeks as investors assess its remarkable collapse. LTC is trading at $62.65, where it has been since May. It has crashed by more than 85% below its highest level in 2021. The current price is the lowest it has been since November 2020. At the same time, the coin’s market cap has crashed to over $4.4 billion, making it the 20th biggest cryptocurrency.
Litecoin has been in a major sell-off in the past few months as concerns about the cryptocurrency industry continues. There are two main reasons why the LTC sell-off has happened. First, demand for Litecoin has simply dried in the past few months. A closer look at on-chain data shows that the number of people buying and holding the coin has been in a downward trend.
Second, like other cryptocurrencies, the actions of the Federal Reserve have contributed to the sell-off. The Fed has hinted that it will continue hiking interest rates in the coming months and push them to the neutral point. Most Fed officials believe that the neutral level is at 2.5%. At the same time, the Fed has started to reduce its balance sheet. Therefore, investors are dumping risky assets because the inverse of what happened in 2020 and 2021 is now happening.
Turning to the daily chart, we see that the LTC price has been in a strong bearish trend in the past few months. This sell-off gained momentum when the coin moved below the lower side of the descending triangle point at $103. Litecoin remains below the 25-day and 50-day moving averages.
It has formed a falling bearish flag pattern, which is usually a bearish sign. Therefore, Litecoin will likely keep falling as bears target the next key support to watch will be at $40. This is despite the fact that the Mayer Multiple has moved to the oversold level of 0.74. A move below the resistance at $70 will invalidate the bearish trend.
This post was last modified on %s = human-readable time difference 11:10