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It is no secret that Litecoin (LTC) has been struggling lately, and the signals on the charts are not looking much better. A number of key indicators suggest that the price of LTC might be on the brink of a big drop, and one in particular stands out: the approaching death cross.
But what does that mean for Litecoin, and what could it spell for its future?
Yuri MolchanFor the past two weeks, Litecoin has found itself stuck in a frustrating pattern, unable to break through its 200-day moving average on the daily chart. That’s right: for 14 days in a row, LTC has failed to break above this important technical level.
In the meantime, the price has been steadily printing higher highs and higher lows, creating a sort of paradox.
The price action should have been bullish, yet it was not able to break through that critical resistance. This, as it turns out, could be the formation of a bear flag pattern - an ominous technical signal that often suggests further declines.
Ultra bearish puzzle
If that’s not enough, the next major concern is the 23-day moving average. This shorter-term moving average is now on track to cross below the 200-day moving average, setting up what traders refer to as a death cross.
Simply put, a death cross is a bearish signal that occurs when a short-term moving average falls below a longer-term one, indicating that momentum is shifting to the downside. Historically, this has often been a precursor to major price drops.
Gamza KhanzadaevIn combination, these signals are starting to paint a worrying picture for Litecoin. The failure to surpass key resistance, the bear flag formation and the impending death cross: put it all together, and you have got a recipe for potential trouble.
If Litecoin follows the script, we could be looking at a drop of around 32%, similar to what happened back in March. That would put LTC somewhere in the $70-$60 range which, let’s be honest, is not where anyone wants to see it.
Vladislav Sopov
Dan Burgin