Litecoin price continued sliding on Wednesday as investors remained extremely fearful about the market. LTC crashed to a low of $51.8, which is about 23% below the highest level this month. Its market cap has fallen to about $2.7 billion, making it the 22nd biggest cryptocurrency in the world. It has crashed by more than 87% from the highest level this year.
Investors are getting more fearful about the state of the financial market. This explains why key gauges in the market are flashing red. For example, the closely watched fear and greed index has dropped to 23, meaning that investors are extremely fearful. At the same time, the VIX index has risen to the highest point in more than a month while the US dollar index has surged to a 20+ year high of near $115.
In times of fear and market jitters, investors tend to move away from riskier assets like cryptocurrencies. This explains why Litecoin and other digital currencies have tumbled. The situation became much dire on Tuesday when the US published strong consumer confidence and new home sales data.
The numbers revealed that confidence among consumers jumped for the second straight month in September as inflation expectations improved. New home sales rose by more than 20% in August. As such, these numbers point to a situation where the Federal Reserve will continue hiking interest rates in the coming months.
The weekly chart shows that Litecoin price has been in a strong bearish trend in the past few weeks. This sell-off continued when the coin fomed a double-top pattern at about $300. It has continued falling and managed to move below the 25-day and 50-day moving averages while the Awesome Oscillator has formed a bullish divergence.
LTC seems to be forming a bearish flag pattern. Therefore, there is a likelihood that the coin will have a bearish breakout as sellers target the next key support point at $22.46, which is about 57% below the current level. This is an important reference level since it was the lowest point in December 2020. The stop-loss for this trade is at $70.
This post was last modified on %s = human-readable time difference 10:29