Litecoin is looking to slump even further. The world’s fifth largest cryptocurrency has been in a slump since its halving earlier this month, dropping below resistance after resistance and breaching the $75 mark. Now, the coin is on the precipice of a slump below $70 for the first time in 4 months.
The larger market is also faring no better. With Bitcoin stuck just above the $10,000 mark and the altcoin brigade unable to budge the king coin’s almost 70 percent market dominance, there looks to be no catalyst for Litecoin to make a U-Turn. At press time, the cryptocurrency is trading at just above $71, with prices falling constantly since August 26.
SHORT TERM:
Source: Trading View
Litecoin began the month at over $100 in price and quickly began a severe downtrend, as the post-halving bulls began to wreck the market. On August 9, the coin dropped by over 14 percent and went below its key support level placed at $87.15. Within the next week, the cryptocurrency shaved over $10, dropping below its support-flipped resistance placed at $78 and $75. Although, no massive price cliffs have been seen since the drop to $75, the price has not managed to break the aforementioned resistance level. However, to shed some respite to LTC, there have been two potential breaches, on 23rd August and 25th August, respectively. However, the volume to back that push was not seen.
As things stand, Litecoin is stuck in a descending channel, as the price seems to be teetering downwards. A flag-post to the descending channel can be charted between 2300 UTC – 0000 UTC time frame on 26 August, during which the coin saw a massive 4 percent hourly gain. The important part to note here is that the support level of $71.93 is being tested, with a rise to $72.5 and a drop down to support seen quite recently. If the same is broken and is accompanied by heavy volume, the next support in the short term that should be looked at is $70.38. Any drop below $70 would likely result in a long term bearish spree, especially in light of what is about to come for the digital silver.
LONG TERM:
Source: Trading View
In the long term, Litecoin is looking to form a head and shoulders pattern. The first shoulder for the same was seen in April, following the coin’s breakout into the Golden Cross which occured during the close of March. The price continued to rise till June, when it topped out at $141, the formation of the head. The price then took a precipitous fall, dropping severely as the halving approached. Through July and August, the price continued to dip, with a slight recovery during the end of August, but to no greater avail.
The neck line for Litecoin during this fall is placed at $71, which the coin is just about touching. If the price falls below the neckline, a severe dip could be seen, especially since the coin is facing its Death Cross imminently.
Source: Trading View
At press time, the 50-day moving average was looking to dip below the 200-day moving average which signals the coming of a long term bearish season. To further compound the same, the Relative Strength Index of the coin is also on a downturn, and was placed at 34.89, at press time.
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