The price of Litecoin (LTC) is following a downward trend and recently touched its 100-day moving average, as cryptocurrencies in general are seeing a significant drop. With LTC already losing 35% from its peak this year, there may be further declines ahead. This pessimistic outlook arises due to the decreased likelihood of a Litecoin ETF being listed on Polymarket, a reduction in active users, and the formation of a head-and-shoulders pattern in the coin’s price chart.
Litecoin Price Could Fall As Odds Of LTC ETF Approval Falls
One factor contributing to the continuous drop in Litecoin’s price is the general expectation among many that a spot Exchange-Traded Fund (ETF) will not be granted approval this week. A survey with $54,000 worth of assets shows that the chances of the ETF being approved by July 31st have decreased to 24%. Another survey with $8,000 predicts a 42% probability of the fund receiving approval.
As an analyst, I’ve observed that only Canary Capital has submitted an application for a Spot LTC Exchange-Traded Fund (ETF) thus far. However, if the Securities and Exchange Commission (SEC) shows more favorability towards the crypto industry, we might see additional applications in the future. In a recent analysis, Eric Balchunas, the Head of ETF Strategy at Bloomberg, anticipates that the SEC will endorse a Spot LTC ETF due to its connection as a Bitcoin Fork.
LTC Transactions Are Falling
Currently, it appears that the number of Litecoin transactions is decreasing alongside its price drop, as pessimism spreads throughout the cryptocurrency market. As per Bit Info Charts, this decrease in activity has brought the number of Litecoin transactions to a level not seen since 2023.
Recently, data indicates that Litecoin’s hash rate has decreased following its peak at 1.95 Petahashes per second earlier this month. It currently stands at 1.71 Petahashes per second, suggesting reduced network activity. Furthermore, this month has seen a decline in the average transaction fee within the Litecoin network as well.
LTC Price Has Formed A Small H&S Pattern
As a researcher, I’ve observed that one potential reason for a significant drop in Litecoin’s price this week could be due to the formation of a small Head and Shoulders (H&S) pattern. This technical pattern is characterized by three distinct points: a head around $117, two shoulders, and a neckline at approximately $96.78. The H&S pattern is often seen as one of the most bearish indicators in the market, suggesting potential price decline.
Litecoin has fallen beneath its 50-day moving average and appears to have stabilized near the 100 Exponential Moving Average (EMA) line. Additionally, it has dipped below a significant support level at $112.67, which was the peak of its highest swing in March of last year.
If the LTC value falls below its 100-day moving average, it suggests a potential further decrease in value. The first significant support level can be found at $86.50, which was the lowest point on December 20th and is approximately 10% lower than the current price. Going below this level would bring the next support to $76.65, a level that LTC previously reached on July 26 and represents a 20% decrease from the current price.
If the Litecoin (LTC) price surpasses the resistance point at $112.67, the previous bearish prediction about its price movement will no longer hold true.
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2025-01-13 15:24