LTC in Consolidation Mode Post-Weekend Slump
Litcoin (LTC/USD) has been in consolidation mode since a broad tumble in the cryptocurrency market over the weekend. Since dropping from above $200 per coin as recently as last Thursday to Saturday lows just above $140 per coin, where it found support at the late-September low, LTC has been stuck in a $140-$166ish range.
At current levels close to $160 per coin, LTC is trading about 14% above its weekend lows. That might sound impressive, but it is a much weaker recovery than seen elsewhere in crypto markets. BTC/USD, for instance, is over 20% above weekend lows, whilst ETH/USD is up nearer 25%.
Weak Dip-Buying Appetite
According to a poll of over 1000 crypto investors compiled on Saturday by Benzinga which asked which cryptocurrency investors would favour buying in light of the recent dip, just 14.3% said Litecoin. That compared to 44.2% who said Dogecoin and 28.7% who said Shiba Inu.
The poll only gave participants the option to buy four cryptocurrencies on the dip, with Ethereum the fourth option and gaining just 12.8% of the responses. But the disparity between Litecoin and the catchier meme coins highlights a long-term problem faced by LTC.
Since topping out at $420 back in December 2017, the cryptocurrency has struggled to generate the same amount of excitement or come anywhere near generating the same amount of returns as some of its sexier peers.
What Next for LTC?
The weekend sell-off marked a near-complete retracement back to the September lows at $140 from the November highs above $300. Should broad risk appetite in cryptocurrency markets take a turn for the worse in the coming session and push LTC/USD back below the weekend/September lows in the $140 area, this would open the door to an extension of losses towards the July/August double bottom slightly above $100.
From a momentum standpoint, the 14-session Relative Strength Index currently sits at around 34.00, above the 30.00 mark that signals conditions having become oversold. That suggests there is further room for a build-up in short positions that could send LTC lower.
Meanwhile, the weekend drop saw LTC/USD drop below its 200-day moving average at $173. Should the cryptocurrency continue to rally but fail to break back to the north of this level, which happens to also coincide with the 78.6% Fibonacci retracement back from the August highs to the September lows, this could be taken as a bearish signal.
This level also coincides with a low from back in late October, so it really will be a tough nut to crack. Should the bull succeed, however, then LTC/USD’s next stop would likely be the $180 level and late November low at $182 just above it.