The price of Litecoin (LTC) has experienced a decline today, following the downward trend seen in the wider cryptocurrency market. On July 5, LTC dropped over 3% to $100.50, while the overall crypto market capitalization fell by 2%. This suggests that traders are securing profits at the local tops of various cryptocurrencies.
One of the factors contributing to Litecoin’s decline is its overbought condition, as indicated by the relative strength index (RSI) on the daily chart. After surging by more than 65% to reach a year-to-date high of $116 on July 2, LTC has corrected by nearly 14%, including the 3% drop on July 5. Typically, an overbought RSI prompts a price drop or consolidation sideways.
Litecoin’s losses on July 5 align with similar downward moves in traditional markets. Traders are eagerly awaiting the release of the Federal Reserve’s meeting minutes from June to gain insights into their stance on interest rates. The market speculates that the Fed may discuss raising benchmark rates twice more in 2023, which has historically had a bearish impact on cryptocurrencies like Litecoin.
Looking ahead to Litecoin’s price outlook for 2023
The current support level stands above $100, having transformed from resistance into support. LTC’s prevailing ascending triangle pattern, depicted on the weekly chart, indicates a technical breakout phase. A successful reversal breakout from this descending triangle could see LTC reach a target price of around $240, representing a 140% increase from current levels.
However, in a bearish scenario, if the ascending channel pattern plays out, Litecoin’s price may test the lower trendline around $85 in Q3, indicating a potential 15% decrease. Furthermore, a breakdown of the bear flag pattern could lead LTC/USD to drop even further, potentially reaching $40 in 2023, which would be a 60% decrease from current price levels.
It is important to note that this article does not provide investment advice or recommendations. Each investment and trading decision carries its own risks, and readers should conduct their own research before making any decisions.