LTC Back Under $150, Bears Eyeing Potential Drop to $105

Cryptocurrency markets came under broad selling pressure on Monday, with the space’s aggregate market capitalisation shedding since over $150B to drop from more than $2.3T to current levels of slightly more than $2.1T.

The deterioration in sentiment came as broader financial market risk appetite came under pressure. Omicron worries are keeping investors cautious into the year-end as infection rates spike in Europe and countries there move to curb transmission by introducing new restrictions.

LTC’s Struggles

Litecoin (LTC/USD) was unsurprisingly not immune to the latest crypto market downturn, dropping back from Sunday’s high above $160 per coin to current levels underneath $150. LTC/USD prices have for now found support in the form of the early December lows around $142, which sit just above the late September lows just under $140. That marks a near

Whilst broader crypto market selling was the major catalyst for LTC’s most recent drop, technical selling has also contributed. LTC/USD ran into resistance in the form of a downtrend that acted as support during November but has more recently switched to acting as resistance in mid-December.

If the cryptocurrency was able to break to the north of this downtrend, then a retest of last week’s highs around $170 would be on the cards. A break above that could open the door to a move towards the late November lows around $183, which currently roughly coincides with LTC’s 21-day moving average.

Bearish Break on the Cards

Since Litecoin’s sharp drop from above $200 at the start of December, the cryptocurrency has forged out a $140-$170ish range, but is now increasingly threatening a bearish break. Momentum indicators certainly don’t seem to be ruling out the possibility of a break lower.

On Monday, the 12-period (on the four-hour candlesticks) exponential moving average (EMA) dropped below the 26-period EMA, sending the Moving Average Convergence Divergence (MACD) indicator into negative territory. Short-term speculators often see the MACD switching negative as a bearish short-term signal.

Meanwhile, the 14-period (also on the four-hour candlesticks) Relative Strength Index (RSI) remains comfortably above oversold levels (which would be below 30) at above 40, implying that there is plenty of room for selling pressure to build without conditions becoming overstretched.

A negative break would open the door to a move lower in LTC/USD towards the summer lows around $105, which would mark a further near 30% drawdown from current levels.