Why Litecoin might falter at this bearish zone
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- LTC was yet to reverse the losses seen early in the week.
- More long positions wrecked as of press time.
Litecoin [LTC] still faces a key roadblock at $103.5 with only two months to its halving event in August. If 2019’s halving event and price action were to be repeated, LTC could expect a massive rally.
Read Litecoin’s [LTC] Price Prediction 2023-24
But history doesn’t always dictate the future. Although the halving could prop up LTC’s value, it must clear the Q1/Q2 price ceiling of $104 to inflict more gains. But a weak Bitcoin [BTC] could hurt such an LTC prospect in the short term.
LTC’s uptrend blocked a key bearish zone
A recovery attempt after a sharp fall from $95 was thwarted near $89. Price has been reacting to $89 for a while now, swinging between support and resistance. However, the level aligned with an FVG (fair value gap) zone of $88.7 – $92.4 (white).
This could make the area a solid bearish zone. A recent recovery attempt was stalled in the FVG zone, pushing the price below $89 at press time. As such, sellers could camp at this bearish area and attempt to seek gains at $84 or the demand zone below $77.5.
Above the bearish area lays a bearish order block and supply zone stretching from $95 to $104. The level is also a Q1/Q2 price ceiling. So, any move beyond the FVG zone could face another likely pullback from this supply zone unless BTC inflicts a bullish bias on the higher timeframe.
In the meantime, LTC recorded steady accumulation from 8 May, as shown by the rising Accumulation/Distribution indicator. However, the RSI retreated to the lower range in June and was rejected at the median level – elevated short-term selling pressure.
With a weak BTC, long positions were wrecked than short positions. In the past 4 hours before press time, close to $80k worth of long positions have been liquidated. But less than $30k short positions were wrecked in the same period, confirming the short-term bearish bias.
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Ergo, the confluence area of $89 and the FVG zone could become a key bearish zone if the short-term bearish bias persists across the board.