Litecoin (LTC) is navigating a turbulent market phase, having recently encountered considerable selling pressure following a sharp rejection from its key resistance level at the 200-day Exponential Moving Average (EMA). As of press time, LTC is trading at $62.86, marking a decline of nearly 1.5% in the last 24 hours. With the altcoin now retracing towards a crucial support zone, the question looms: can the bulls bounce back and regain lost ground?
A Closer Look at LTC’s Price Action
The recent downturn for Litecoin began when it reversed from the $71 resistance level associated with the 200-day EMA. This rejection triggered a pullback towards its current price level, which hovers near a pivotal support area around $62. Notably, the price is situated at the convergence of horizontal support and an ascending trendline, making this juncture critical for LTC’s near-term trajectory.
Traders should be cautious, as the 20-day and 50-day EMAs have begun to turn downward. If this trend continues and the 20-day EMA crosses below the 50-day EMA, it could signal increased selling pressure. In such a scenario, the next significant support zone for LTC would likely fall between $55 and $60.
Indicators Reveal Bearish Sentiment
The market sentiment surrounding LTC appears bearish, with the Relative Strength Index (RSI) currently hovering near 42. While the RSI is not yet in the oversold territory, this recent pullback suggests that selling momentum could persist before buyers regain control. Additionally, the Moving Average Convergence Divergence (MACD) reinforces this bearish outlook, as both the MACD and Signal lines trend downwards following a recent bearish crossover. A decline below the zero mark on the MACD could expose LTC to further losses in the near term.
The Battle for $62–$63 – Key Support Zone
To prevent additional downside movement towards the $55 mark, bulls must defend the $62-$63 support zone. However, if the broader market sentiment swings in favor of the bulls, traders could witness a short-term rally targeting resistance levels between $68 and $70.
Recent derivatives data from Coinglass provides more insight into the current market dynamics. Trading volume for LTC has plummeted by 36.22% over the past day, reflecting a notable decline in trading activity, which may indicate high uncertainty among traders. Additionally, a slight decrease of 1.31% in Open Interest during this time suggests traders are adopting a cautious approach.
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Despite this bearish sentiment, the overall long/short position ratio stands at 0.9608, revealing a slight bearish edge. Interestingly, the Binance long/short ratio indicates a robust bullish edge at 2.4106.
