Litecoin (LTC) has been one of the few altcoins demonstrating resilience against Bitcoin, even outperforming some major crypto assets. However, the recent market downturn has taken a toll on LTC, with its price plummeting to $95—a sharp 15% drop within a week. This decline has sparked concerns among traders, but crypto analyst Ali Martinez suggests a potential recovery may be on the horizon.
MVRV Ratio Signals Potential Upswing
Martinez highlights Litecoin’s Market Value to Realized Value (MVRV) ratio as an indicator of possible bullish momentum. The MVRV ratio is used to assess whether an asset is undervalued or overvalued. A low MVRV ratio often signals accumulation, while a high ratio suggests profit-taking.
Despite Litecoin testing the critical $100 support level, Martinez’s analysis indicates that its MVRV remains in a healthy range. This suggests that long-term holders are maintaining confidence in LTC, and selling pressure remains relatively low. If this trend continues, Litecoin could rebound to $108 and possibly extend gains to $117.
Exclusion from U.S. Crypto Reserve Fuels Bearish Sentiment
Litecoin’s exclusion from the U.S. Crypto Strategic Reserve has contributed to its recent decline, shaking investor confidence. This decision led to increased bearish sentiment and an influx of short positions against LTC. While some investors still hold out hope for a Litecoin ETF approval, other key developments, such as the upcoming White House summit and the U.S. Non-Farm Payrolls (NFP) report, may further impact market sentiment in the near future.
Litecoin at a Critical Crossroad
With Litecoin now trading below the $100 mark, the risk of further losses increases if buyers fail to step in. The price has touched the lower Bollinger Band at $102.77, indicating oversold conditions and heightened volatility. The Relative Strength Index (RSI) sits at 37.62, suggesting that LTC is approaching oversold territory.
If Litecoin fails to reclaim the $100 support, further declines could push it toward the next major support level at $85—a zone historically associated with strong buying interest. However, technical indicators hint at a potential rebound if buyers re-enter at key support levels.
Also Read: Litecoin (LTC) Poised for Rebound? Key Metrics Signal Bullish Recovery After Market Dip
While bearish pressure persists, Litecoin’s fundamentals and technical outlook suggest that a recovery could be imminent.
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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