Litecoin Bulls Retreat: Is This the Start of a Bigger Collapse?
Due to increased selling pressure, Litecoin (LTC) has dropped 1.62% over the past day, lowering its market capitalization to around $6.4 billion. Key technical indicators have entered a bearish area as a result of the steep decline, and momentum metrics are rapidly deteriorating.
While the Ichimoku Cloud and EMA formations both point to ongoing negative danger, the RSI is getting close to oversold levels. LTC‘s price may drop before any significant recovery effort starts if it doesn’t find support soon.
LTC Nears Oversold Zone: RSI Plunge Signals Buying Opportunity?
The Relative Strength Index (RSI) of Litecoin has rapidly changed the market’s momentum, falling from 61.4 to 35.92 in just one day. A momentum oscillator called the RSI helps traders spot possible overbought or oversold situations by calculating the rate and size of recent market movements.
The RSI for Litecoin is currently slightly above the oversold level, indicating waning bullish momentum and increasing selling pressure. Although a score of 35.92 does not yet indicate an oversold situation, it places LTC perilously near levels where buyers may begin searching for bargains. Short-term recovery and a possible bottom may be indicated if the RSI falls below 30.
Litecoin Trapped Below Ichimoku Cloud: Bearish Signals Strengthen
With price activity much below the red cloud (Kumo), which denotes downward momentum, the Ichimoku Cloud chart for Litecoin currently shows a bearish setup. A red cloud is formed ahead by the leading span lines, Senkou Span A (green) and Senkou Span B (red), indicating that the bearish trend might continue in the near future.
Strong resistance above present price levels is usually reflected by a thick red cloud, which makes higher breakouts more challenging unless momentum changes significantly. The bearish bias has also been further confirmed by the Tenkan-sen (blue line) crossing below the Kijun-sen (red line). While the cloud ahead stays flat, indicating a lack of bullish conviction or volatility growth, this crossover confirms short-term weakness.
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