Litecoin, which serves as a Bitcoin price proxy since they are very tightly correlated, continues to trade in a very tight range on low volumes, even as recent events on the legal side of things fail to shake up the market.
The latest of such legal actions by regulators comes from the US, where the United States Securities and Exchange Commission (SEC) has filed charges against top execs behind the AML BitCoin ICO scam. The charges claim that Rowland Marcus Andrade of the NAC Foundation swindles investors to the tune of $5.6 million via a bogus initial coin offering (ICO) project for AML Bitcoin in 2017/2018, at the height of the ICO boom. The charges also name a former US lobbyist, Jack Abramoff, as part of the ICO scam. Abramoff served a 4-year sentence in the mid-2000s for corruption.
Such cases had dampened investors sentiment in the past just when the crypto markets were on the verge of a bull run. This instance seems no different. Bitcoin prices and Litecoin’s price action on the LTCUSD have been drifting lower in a gradual fashion, devoid of the usual steep price moves that follow such action.
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Litecoin is trading within a descending channel and has now approached a significant support level on the daily chart. The 41.44 price level is the site of former lows of 23 April, 12 May and 21 May 2020. Price also tested this area as recently as 26 June without breaking below it. A brief drop in 27 June below this level bounced off the 39.03 support level and quickly went back up in a false breakdown move. Rejection at 41.44 could send prices lower once more, testing the 39.03 support (2/15 April and 10 May lows). Further downside targets exist at 36.82 and 34.37 and depend on sellers being able to force a breakdown of 39.03.
On the flip side, a push above 41.44 targets the channel’s upper border initially, and only a breakout above this border will enable LTCUSD to target the 45.13 resistance level. 48.31 and 49.88 remain viable upside targets. The latter is especially crucial for bulls, as the 200-day moving average interacts with this price level. Only a break above the 200-SMA allows LTCUSD to cross the $50 psychological price level.