Should Litecoin bulls be worried as price drops below $100
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The Litecoin buyers have no reason to panic yet as price action remains bullish.
- The lower timeframe trend and the drop below the psychological $100 level could also be the beginning of a reversal
Litecoin [LTC] spent a good portion of April and May retracing the gains it made in March. June did not start well for the bulls as LTC dropped to $71 but the bulls have driven an incredible rally since then.
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In the 1-day timeframe, the market structure of Litecoin remained bullish. Yet the dip below $100 raised concerns that sellers were beginning to seize the initiative. The $90-$92 region could be vital in determining whether the bulls or the bears win this battle.
Litecoin falls beneath a bullish breaker block, but buyers can still hopeIn the 1-day timeframe, Litecoin had strong bullish momentum as it raced past $100 on 30 June. Over the past week’s pullback, this momentum has become muted. To reflect this the RSI fell toward neutral 50 but continued to show upward momentum.
The OBV was in an uptrend, and alongside it, the CMF also showed capital flow into the market. Together the volume indicators showed that demand was still present behind Litecoin. Yet, the bearish order block it formed on 18 April was not defended as a support zone upon a retest.
The Fibonacci retracement levels (yellow) were plotted based on the swing move from $70.75 to $115. The 50% and 61.8% retracement levels at $92.88 and $87.65 were not yet tested as support. It remained likely that these levels could provide a bullish reaction from Litecoin.
The decline in MVRV showed profit-taking but will the Open Interest begin to recover?Coinglass data showed that the recent LTC rally was accompanied by a huge spike in Open Interest. As prices began to drop, the OI fell too. While this highlighted discouraged bulls in the past week, it was not a sign of a trend reversal. Santiment data underlined the fall in the 90-day MVRV ratio which meant some holders have sold the asset to realize profits. Yet the mean coin age has begun to climb once again, hinting at the accumulation of Litecoin.
How much are 1, 10, or 100 LTC worth today?
Together with the price action in the 1-day timeframe, the bias remained bullish. The bears would be in the driving seat upon a drop in Litecoin prices below the $87.65 mark.
It was possible that the price action could be choppy but above $90 in the coming days. This would point toward a consolidation phase before the next major move.