The US dollar index jumped to its highest level in five months.
This rally occurred as the U.S. economic growth continued.
Cryptocurrencies such as Litecoin have an inverse relationship with USD.
Litecoin Prices continued to remain under extreme pressure on Tuesday as the US Dollar Index (DXY) surged to its highest level in five months. LTC retreated to the lowest level of $62 and remains near the lowest level since December of last year.
US dollar index soars
Litecoin and other cryptocurrency prices have come under scrutiny following last week’s incident. On Wednesday, the U.S. Securities and Exchange Commission (SEC) dealt Grayscale a major blow when it won a major lawsuit in the United States.
This win means the SEC is likely to approve the launch of a spot Bitcoin ETF. Coins like BTC and LTC surged after the news broke, but their rally fizzled after the SEC decided to delay a decision on funds from companies like Blackrock and Invesco.
Litecoin investors are closely watching these events due to the close correlation that exists between BTC and LTC. First of all, Litecoin was created by the Bitcoin people.
Therefore, if Bitcoin succeeds in being held in a spot ETF, it is highly likely that Litecoin will soon be held in an ETF as well.
Another big event moving Litecoin is the strong performance of the US dollar. The dollar index reached $104.5, the highest in over five months. It soared more than 5.25% from this year’s lowest point.
The index rose due to the strength of the U.S. economy. Recent data shows countries like China and Germany are struggling. At the same time, the Federal Reserve raised interest rates to the highest level in more than 20 years.
as i wrote here, The resurgence of the U.S. dollar has pushed yields on underlying instruments such as money market funds and CDs above 5%. Therefore, investors are moving from cryptocurrency assets such as Litecoin to these assets.
Litecoin price prediction
Looking at the daily chart, we see that LTC price has been trending downward over the past few weeks. This selling trend has accelerated further since 2009. LTC half-life The momentum has waned. It has moved below all moving averages and is now forming a bearish pennant pattern. Both of these patterns are generally bearish.
Therefore, Litecoin price is likely to trend lower as sellers target the next support level of $55.
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