- LTC formed a bearish flag at press time, indicating a further plunge despite the recent plunge.
- Long-term holders were liquidating their positions.
Litecoin (LTC) was one of the top cryptocurrencies hit hard by the market crash on December 3rd. That’s because its value has fallen 11.17%, according to data from CoinMarketCap.
Although market prices are starting to recover, the same may not be true for LTC.
Analyst Ali Martinez made this prediction: According to Martinez, LTC was facing extreme selling pressure. This selling was one of the reasons the price plummeted from $72 to $65 at press time.
But that may not be the end of Litecoin’s terrible season, Martinez said.
In a post on X (formerly Twitter), the analyst shared a 3-day chart showing LTC forming a bearish flag. Martinez noted that the coin could fall as low as $38 as a result of the formation.
Outlook after recent downtrend #Litecoin It looks challenging. If selling pressure continues $LTC A drop to $38 could potentially confirm the formation of a bearish flag. pic.twitter.com/Y21U6eR5tw
— Ali (@ali_charts) January 3, 2024
There is no trace of the bull in the photo
A drop to $38 would cause LTC to lose 1.71 times its press time value. However, the prediction will only come true if sellers continue to push price action further.
If this happens, Litecoin’s candlestick pattern may extend downward, confirming the formation of a bearish flag.
This prediction was verified by Hodler Net Position Change. This indicator shows the monthly position changes of long-term investors. As Litecoin HODLers accumulate new positions, the net change is positive.
According to AMBCrypto’s analysis of metrics, the net change turned negative on December 28, 2023. It remained the same after that. This decline indicates that Litecoin HODLers are cashing out instead of accumulating.
Source: Glassnode
In addition to on-chain data, AMBCrypto also assessed the technical state of LTC. At press time, the sharp decline indicated by the red candlestick confirmed extreme selling pressure.
LTC is still the fall man
If we look at the MACD, we can see that the momentum is bearish. MACD’s signals confirmed this theory, as the 12-day EMA (blue) crossed below the 26-day EMA (orange).
This position indicated that LTC would continue to oscillate downward. Moreover, the 50 EMA (yellow) has formed a dead cross at the 20 EMA (cyan). This supports the point that LTC is trending downward.
So what’s next for Litecoin? According to the 0.236 Fibonacci retracement, LTC may fall to $63.72 in the near term.
Source: TradingView
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However, it seems that traders have not given up on Litecoin yet. AMBCrypto drew this inference from its funding rate, which was 0.01% at press time.
These positive numbers mean that there are more traders with bullish beliefs than those with bearish views.