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Analysis

Litecoin might resume the downtrend after a minor bounce, here’s why

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There was an FVG on the H4 chart that extended from $65.97 to $72.79 that Litecoin left behind during its rapid descent on 17 August. Therefore, a bounce to $72 was possible to fill this gap.
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Litecoin [LTC] traders could see the downtrend resume after a minor bounce, here's why
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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

  • Litecoin noted a firm bearish market structure and momentum on the 4-hour chart.
  • The higher timeframe support zones were convincingly breached, paving the way for further losses.

Litecoin [LTC] saw its halving occur on 2 August. The hash rate has climbed since then, and the mining difficulty increased as the mining reward decreased. But this trend could begin to unwind soon.

Read Litecoin’s [LTC] Price Prediction 2023-24

On the price chart, the trend has been bearish in recent weeks. The asset has lost significant levels of support stretching back to July, and the downtrend has not abated in August. While a continuation was likely, a bounce toward $70 was also possible.

The H4 fair value gap on the Litecoin chart could attract prices higher

Litecoin [LTC]

Source: LTC/USDT on TradingView

The resistance zones at $84 and $70 were demarcated in red and represent a former bullish order block on the 1-day chart. After LTC breached these zones, they were flipped to a bearish breaker. The one at $70 was established in mid-March, and the rally to $100 began in this area.

The past few days of price action showed sellers were overwhelmingly strong. Moreover, the Fibonacci retracement levels showed that, since the 78.6% level based on the move upward was broken, it was likely that LTC would continue downward to the 23.6% extension level southward at $60.23.

There was an FVG on the H4 chart that extended from $65.97 to $72.79 that Litecoin left behind during its rapid descent on 17 August. Therefore, a bounce to $72 was possible to fill this gap before the prices were forced lower once again.

The Open Interest chart showed sidelined speculators as funding rates remained negative

Litecoin [LTC]

Source: Coinalyze

The bearish conviction has not left the Litecoin market yet. The short-term data from Coinalyze for the past few days showed that after the steep fall, the funding rate flipped negatively and has stayed that way since.

How much are 1, 10, or 100 LTC worth today?

Litecoin slowly climbed higher from $63 to $66.4 over the weekend, but the Open Interest did not see a notable move higher. Over the past few hours, it appeared to tick upward, showing minor short-term bullishness.

The spot CVD was pushing higher too. Together they showed a small influx of capital, but likely not enough to break the market structure.

 

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Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
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