Litecoin Tests Critical Support as ETF Inclusion Fails to Spark Rally
Market Structure Shifts Lower
- Litecoin (LTC) price is down 16.3% on a weekly basis, continuing the negative bias from 6 months down 31.4%.
- Momentum indicators have recently reached oversold levels, supportive of a recovery, rather than a further decline.
- Key in the short-term is for bulls to defend support at $81.79. A consolidation is likely, as volumes fell this week.
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| Metric | Value |
|---|---|
| Asset | LITECOIN (LTC) |
| Current Price | $81.79 |
| Weekly Performance | 1.91% |
| Monthly Performance | -16.30% |
| RSI (Relative Strength Index) | 43.2 |
| ADX (Average Directional Index) | 18.0 |
| MACD (MACD Level) | -2.25 |
| CCI (Commodity Channel Index, 20-period) | -56.62 |
RSI Plunges to 43.23 – Oversold Territory Beckons After ETF Disappointment
With the oscillator reading a mere 43.23, momentum is slumping fast from last week’s more neutral 58.22 print. It collapsed with the price but, in an encouraging sign for bears, this decline stopped just short of the oversold 30 level, indicating there’s room for more downside pressure if sellers remain pent up, which they seem to be for dealers in the inaugural Vanguard Long-Term Corporate Cash ETF.
It is instructive to observe how RSI reacted to comparable conditions in early 2024 when readings in the low 40s led to further decline prior to bottoming out. For swing traders, this kind of a neutral-to-weak RSI suggests refraining from trying to catch a falling knife until more obvious turnaround indicators appear. The new ETF launches may well become a source of demand, but the momentum setup suggests that caput may be so print first.
ADX at 18.03 Confirms Choppy Conditions Despite ETF Catalysts
The ADX reading came hand in hand with Bitcoin’s punchy 20% rally in the week following the January 6th red candle. The candle on Jan 6th was a 13% bearish outside bar and led to a substantial closing of long congestion, resulting in less UTXOs in a profit position facing retest. It was a dangerous setup for a cascade of liquidations, but buyers barely managed to keep it afloat, adding to the tension in the market.
After November’s major breakouts, ADX (average directional movement index) steadily decreased, signaling to traders that Litecoin was in a grinding consolidation phase rather than trending strongly in either direction. As a result, range-trading strategies have been more appropriate than trend-following strategies and that remains the case until ADX once again reaches above 25. The ETF story could trigger some trending moves, but from a technical standpoint we’re not quite there.
20-Day EMA at $84.37 Transforms From Support to Resistance Cap
The price is currently testing the key $81.50 horizontal zone and must print a daily close above this level to stand a chance of retesting the highs. Siting dangerously close to a significant drop in price, the RSI remains in an unfavorable position trending beneath the 30-level. The MACD line has also fallen to the lowest levels since the October 17th lows reinforcing the bear grip. Contains much of the same information in a way that a human could understand it.
When you take a step back and look at the architecture of this broader moving average map, the 100-day EMA at $91.06 and 200-day EMA at $95.15 are so far above the current market that they no longer seem a relevant level to watch but rather a distant memory. This compression of the market below all major moving averages stands in stark contrast to the favorable news Litecoin has absorbed in the form of exchange-traded products (ETPs). Yet until those internal flows suddenly materialize and convert directly into buying, these technicals simply reflect a market that is waiting for its next big reason to move. That trigger could either come from more Litecoin-specific updates or be precipitated by a broader crypotocurrency move.
Support Clusters at $74.91 While Resistance Stacks From $91 to $109
Bulls are currently trying to hold the $80 level, which is an important psychological support. A more solid support level can be found at the low of July at $74.91. This level became an important level after serving as support on numerous occasions in 2024 and similar to the previously discussed level, the most crucial one to the upside that would need to hold to maintain any form of bullish market structure. If the price breaks below it, the technical void could send the price further towards the yearly pivot at $70.23.
There are strong resistances above, first from the 100-day EMA at $91.06 and then the monthly pivot at $91.54. The most intense cluster of resistance is in the vicinity of $103.98, where the 200-week EMA meets the psychological resistance of the 100 handle. 87% of Standard & Poor’s 500 companies have experienced analyst downgrades, suggesting there is plenty of negative news already baked in.
The market structure has a squeezed range between $74.91 and $91.06 with price inching closer to the lower boundary. The inability to hold any ETF inspired rally pushes tells us that the institutional story either needs more time to play out, or that general crypto weakness is outweighing Litecoin specific drivers. $318 Elliott Wave targets are a pipe dream if price can’t even get back its 20 MA.
ETF Flows Need to Materialize Before Bulls Can Target $91 Resistance
Bulls need a clear daily settlement over $84.37 to recapture the 20-day EMA and flip short-term sentiment bullish. If those institutional flows from the Vanguard LTCC and Bitwise products do eventually show up, the initial substantive target is $91.06 as the 100-day EMA coincides with the monthly pivot resistance cluster.
If the $74.91 support fails, it will indicate the bearish scenario is in play for WTI. This support captures a prior swing low (Sep. 1) and defines a target area for declines from most phases since mid-September. A break through $74.91 would quickly flood stop-loss orders, exacerbating downside pressure … with $70 becoming a primary profit target.
The latest momentum divergences at prior resistance from the huge H&S top formation LTCCNY foretold the sharp reaction and downside quickly met our long-held .0095 target. Since early December, BIP001 has been working feverishly to elevate market awareness and create new demand for Bither.
