Litecoin (LTC) has seen its price decline significantly over the past couple of months, wiping out most of the gains it made earlier in 2022. After reaching highs of around $140 in early May, LTC has dropped below the key psychological level of $80.
This steep drop can be attributed to the broader weakness in the crypto market, exacerbated by the collapse of major projects like Terra/LUNA. Bitcoin, the largest cryptocurrency, has also struggled to maintain levels above $30,000, dragging down other altcoins.
The recent Litecoin halving event in August, which reduced mining rewards from 12.5 to 6.25 LTC, failed to provide any upside momentum. Instead, LTC plunged over 20% in the week following the halving. This sell-off indicates miners could be offloading their holdings after the halving reduced their profits.
From a technical perspective, Litecoin had found strong support around $80 over the past couple of months. However, bears have managed to overwhelm this level, turning it into resistance. The key support level to watch now is around $75.
The current momentum indicators suggest Litecoin remains in bearish territory. The daily relative strength index (RSI) for LTC shows oversold conditions below 45, reflecting extremely weak buying sentiment. Meanwhile, the on-balance volume (OBV) continues to trend lower despite some consolidation, pointing to distribution. The MACD line sits below the signal line on the daily chart, pointing to negative momentum.
In the futures market, open interest declined sharply in early and mid-August, suggesting long holders were forced to capitulate and close positions. The overall market mood remains decisively bearish for Litecoin.
In terms of support and resistance levels, LTC looks to have initial support around $75 where bulls could attempt to stabilise the price. Below that the next major support level sits at $65 which could halt the decline if $75 fails to hold.
On the upside, LTC faces immediate resistance at $90 which previously acted as support before giving way. Beyond that, further resistance is expected at $105 and $115 where bulls will likely encounter selling pressure. Overall the technical picture remains tilted to the downside for Litecoin unless bulls can reclaim the $90 level.
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