Litecoin (LTC) price selling will continue until this happens

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Litecoin price is in a consolidation phase as investors wait for the next key catalyst. It is trading at $51.87, around 28% above the June low. Its market capitalization currently stands at $3.67 billion, making it the 21st largest cryptocurrency in the world. At its peak, LTC was among the largest coins in the world.

Why did LTC crash?

Litecoin is a leading cryptocurrency that was created to address the challenges bitcoin faces as a medium of exchange. For example, Litecoin has a larger supply cap than BTC. It is also much faster and its transactions are much cheaper.

LTC has a close correlation with bitcoin. Therefore, the factors that pushed BTC to $20,000 are the same factors that caused Litecoin to fall.

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First, there is the issue of the Federal Reserve. In an effort to protect the US economy from the pandemic, the Fed decided to cut interest rates to a record low. He also implemented quantitative easing (QE), which involved printing trillions of dollars in cash.

Learn more about how to invest in cryptocurrencies.

As a result, these actins pushed bond yields to record highs and riskier assets to record highs. Stocks and cryptocurrencies surged. Now the Fed is doing the opposite. The bank has started raising interest rates and implementing quantitative tightening (QT). Consequently, investors are moving away from riskier assets like Litecoin and Bitcoin.

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Second, on-chain data shows that activity in the Litecoin ecosystem has declined sharply over the past few months. This means that very few people hold and use Litecoins for transactions.

Finally, recent events in the crypto industry have led to a drop in demand for LTC. Some of the most important events are the collapse of Voyager Digital, Celsius, Vauld and BlockFi. Most investors have given up on their crypto investments because they avoid being caught in such a situation.

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Litecoin Price Prediction

The daily chart shows that the price of LTC has been following a strong downtrend over the past few months. The coin managed to break through several important support levels such as $92.11 and $100 during this selloff. It remains below the 25- and 50-day moving averages while the Relative Strength Index (RSI) is in neutral at 50.

Therefore, Litecoin will continue its downward trend as long as it remains below both moving averages. Until that happens, LTC will likely retest the support at $40.

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