- Litecoin experienced a significant price surge before facing a sharp decline.
- LTC reached $127.70, a key resistance level, before investors began taking profits, causing a downturn.
Litecoin [LTC] experienced a significant price surge before facing a sharp decline. The initial bullish momentum was likely fueled by macroeconomic factors, including news of increased crypto adoption in the U.S. reserve.
LTC reached $127.70, a key resistance level, before investors began taking profits, causing a downturn.
This sharp selloff was further amplified by the failure to sustain above the $120.48 (38.2% retracement level), leading to increased selling pressure.
The $118.25 (50% retracement) acted as a brief support, but the rejection at $123.46 indicated that bears were still in control.
Why the drop?
LTC’s recent decline aligned with bearish technical indicators.
The EMA cross showed bearish momentum, with the price trading below the 9-day and 26-day exponential moving averages, signaling potential downside risk.
The rejection at $123.46 reinforced short-term bearish sentiment, as bulls failed to sustain gains above the resistance level.
Also, The Fibonacci retracement levels suggested that $116.02 remained a critical support level. A breakdown could accelerate losses to $112.85, confirming a deeper pullback.
The chart’s structure indicates a potential double-bottom formation, suggesting a possible trend reversal if bulls defend the $116 region. If a bounce occurs, LTC could reclaim $121.74, the last key moving average resistance.
A sustained move below $116 would confirm extended bearish pressure. Conversely, if bulls regain control, LTC could push toward $127.70, with a breakout above that level leading to a test of $132.
Implications for future price action
The netflow data revealed significant outflows from exchanges, suggesting accumulation. The 24-hour change of -50.49K LTC indicated that traders were withdrawing large amounts, potentially reducing selling pressure.
Over the last seven days, +9.16K LTC flowed into exchanges, signaling short-term selling interest. However, the 30-day net outflow of -68.96K LTC suggests broader accumulation.
Source: IntoTheBlock
When total netflow is near 0, market sentiment remains neutral, with no strong bias toward buying or selling.
However, sustained outflows typically indicate bullish accumulation, as fewer tokens remain on exchanges for immediate selling. This aligns with LTC’s recent support at $116, where buyers could be stepping in.
If exchange outflows continue, LTC may experience a supply squeeze, pushing prices higher. Conversely, if net inflows increase, selling pressure could rise, leading to further downside.
Monitoring netflow trends alongside price movements will provide a clearer direction for LTC’s next move.
Profitability and market impact
Finally, LTC’s break-even analysis provided an insight into investor sentiment and potential supply pressure. At the press time price of $117.17, 76.78% of holders remained profitable, while 21.22% were at a loss.
The remaining 2% were at breakeven levels.
Source: IntoTheBlock
This distribution suggested that most investors were still in profit, reducing the likelihood of panic selling.
The majority of LTC holders acquired their positions at prices below $117.17, making strong support levels more likely to hold.
However, a decline toward $113.83 or below could trigger increased selling from those seeking to minimize losses.
If LTC pushes above $119.36, more traders will enter the profitable zone, reducing selling pressure. A breakout above $127.70 would see most positions in profit, supporting a push toward $132.
However, if LTC breaks below $113.83, downward pressure may increase, with potential declines extending toward $108.80.
The break-even data reinforces the importance of key price levels in dictating LTC’s near-term trajectory.
