Litecoin (LTC) has experienced a significant pullback, falling below $63 on August 22, 2024, after four consecutive losing days. This decline is primarily attributed to profit-taking among short-term traders who bought LTC during the recent market recovery.
Following the August 5 crash, Litecoin and XRP saw substantial gains, driven by factors such as the favorable Ripple vs. SEC ruling and Russia’s legalization of crypto mining. However, this upward momentum has now stalled, as the market enters a consolidation phase.
Profit-Taking and Weak Demand Pressure Litecoin
The failure of Litecoin to break above the $70 resistance level has triggered a profit-taking frenzy among traders. This selling pressure, combined with a lack of strong buying interest, has pushed the price lower.
An analysis of Litecoin’s exchange market depth reveals a significant imbalance between sell and buy orders. This imbalance, coupled with the weakening demand for LTC, suggests that the market is currently dominated by sellers, suppressing any upward price movement.
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Technical Indicators Signal Bearish Outlook
The Keltner Channel and Parabolic SAR indicators are currently leaning bearish, suggesting a potential continuation of the downward trend. Litecoin’s failure to sustain its recent rally and the Parabolic SAR’s flip below the current price level indicate a shift in momentum towards the bears.
Price Forecast: Bulls Battle to Hold $60 Support
With Litecoin trading around $63, the bulls are now fighting to hold the critical $60 support level. If this level is breached, the next significant support is likely around $55.
Overall, the bearish setup highlighted by the market depth and technical indicators suggests that Litecoin may struggle to regain the $70 level in the near term. The $60 level is crucial, and a break below it could trigger a more extended downside move.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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