Litecoin bulls have a shot at reversing recent losses – here’s how
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Litecoin price action showed a move below $80 could be followed by an extended downtrend.
- The on-chain metrics painted a hopeful picture for the beleaguered bulls.
Litecoin [LTC] saw a strong pump in late June. The price gained 41% within a week as LTC surged from $81 to $115. But July and August saw bearish pressure begin to dominate. At the time of writing, LTC was trading at a vital support zone.
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Any further losses for LTC would flip its higher timeframe bias bearish. The decrease in hash rate on the network after the Litecoin halving event was a cause for concern. The downtrend in prices after the halving showed that a repeat of 2019 was a possibility.
The bullish order block presented a chance for buyers to redeem themselvesOn the 1-day price chart, the RSI was below neutral 50 since 15 July, showing bearish momentum. The Awesome Oscillator made a bearish crossover on 20 July, reinforcing the finding from the RSI. The OBV began to slide lower in August to highlight increased selling pressure.
The price action showed the market structure was bearish after the fall below $91.6. The subsequent retest of the $100 resistance zone and rejection showed bears had the upper hand. At the time of writing, LTC sunk to the bullish order block at $81.4-$88, highlighted in cyan.
The 78.6% Fibonacci retracement level (yellow) was close by. Together, these factors underlined that LTC bulls must defend the $80 area and drive prices higher. If they fail to do so, further losses were likely.
LTC buyers could be gaining strength amidst the price slumpWhile the price action showed the long-term bulls were in a do-or-die situation, the on-chain metrics signaled bullish strength. The 90-day mean coin age has been rising in July, showing accumulation across the network. The dormant circulation metric noted no significant spikes in July either, which meant large waves of selling were not seen.
How much are 1, 10, or 100 LTC worth today?
The MVRV ratio noted that LTC was an undervalued asset in recent days after its price slump. This does not guarantee a recovery, but it embellished the chances that the bulls have.
The halving event in 2019 saw a rally roughly a month before the event. It was followed by an extended downtrend and consolidation phase that took 500 days after the halving to break above the level LTC was trading at halving.