Litecoin breaks below crucial support level – more losses likely?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Selling pressure took LTC below the key support level.
- Open Interest highlighted discouraged longs with sharp drops in open positions.
Litecoin’s [LTC] bearish swing took it under the $80 psychological level, as bears wiped off all of the altcoin’s Q2 gains. Earlier, bulls had high hopes for the halving event which was expected to reverse the severe losses LTC suffered in July and August.
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However, the opposite has been the case with sellers overwhelming the market and flipping the key $80 level to resistance. Litecoin’s steep price decline has been worsened by Bitcoin’s [BTC] dwindling price action which has kept it under the $29.5k price level.
Bulls lose key support level
The $80 psychological level has always been a bullish stronghold. A look southward showed the buying strength at this level in late June led to a significant rally for Litecoin.
As the bearish swing approached this critical support level, a price report highlighted the possibility of bulls rallying again from the level. However, the intense selling pressure saw Litecoin sink below the $80 support. This gave bears the leverage for more gains with LTC trading at $78, as of press time.
The RSI stayed under the neutral 50 and moved into the oversold zone, indicating extremely weak buying pressure. Similarly, the OBV continued its decline, dropping by over 1 million within the past 24 hours.
The current price action suggested bulls might have to wait for the price to get to the $72 support level to mount a rebound. This gives sellers profit-taking opportunities between $73 – $75.
Sellers boosted by bearish bias in derivates market
The four-hour Open Interest (OI) data from Coinalyze revealed bearish sentiment in the futures market. The sharp decline of the OI on 8 and 15 August showed frustrated LTC longs being forced to liquidate their positions.
Realistic or not, here’s LTC market cap in BTC terms
Similarly, the spot CVD remained in a perpetual decline. This suggested a disinterest by buyers, encouraging sellers to open more short positions in the near term.