Litecoin (LTC) has been moving down since November 2021, and the price of this cryptocurrency crashed last month to levels not seen since September 2020.
But where is the price of Litecoin (LTC) going next, and what can we expect from the third quarter of 2022?
The crypto market saw modestly higher prices this trading week, despite warnings from analysts that the market could fall further, and traders are looking for an attractive bottom level to enter. On Wednesday, Bitcoin surpassed $24,000, which has also positively influenced the price of Litecoin.
Today, Crypto Lists will discuss Litecoin price estimates from a technical and fundamental analysis perspective. Please note that there are also many other factors to consider when entering a position, such as your time horizon, willingness to risk and how much margin you got if trading with leverage.
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- 1 The last several months have been extremely tough for the cryptocurrency market
- 2 Technical analysis for Litecoin
- 3 Main support & resistance levels for Litecoin
- 4 What speaks for the rise in the Litecoin price
- 5 What indicates further downfall for Litecoin
- 6 Litecoin price expectations from analysts and experts
The last several months have been extremely tough for the cryptocurrency market
The last several months have been extremely taff for the cryptocurrency market. Cryptocurrencies have been suffering from heavy selling due to hawkish signals from central banks and uncertainty due to the Ukraine crisis. Many central bank officials have agreed that very high inflation warranted restrictive interest rates, and they confirmed that they would be open to being even more restrictive if inflation persists.
While the rate increases are intended to tame inflation and thus help the economy, investors are worried that an aggressive interest rate could tip the economy into recession. Risk-on assets tend to suffer in such conditions, and it is important to say that risky assets like stocks and cryptocurrencies have been considerably impacted by the US central bank’s tightening monetary policy.
International Monetary Fund Managing Director Kristalina Georgieva said that the US central bank is on the right path to bringing down inflation, and investors hope that the Fed will adopt a more accommodating approach at its following policy meeting. Matt Weller, global head of market research at Forex.com, said:
“Like many risk assets, the crypto market is benefitting from investors ratcheting down their expectations for the Fed’s peak interest rate this cycle to around 3.75% around the end of the year.”
Jeong Seok-moon, the head of South Korean exchange Korbit, said that crypto winter could end before the end of 2022, but he also thinks that the US Federal Reserve’s attempts to fight high inflation would continue to influence crypto markets in the meantime.
Technical analysis for Litecoin
After hitting recent highs above $130 in March 2022, Litecoin (LTC) has encountered losses of more than 60%. The price has now stabilized above $50 support, but a break below this level would indicate that Litecoin could probably test the support level at $40.
On the chart below, I marked the trendline, and as long the price of Litecoin is below this trendline, we can’t talk about a trend reversal, and the price of Litecoin remains in the SELL-ZONE.
Main support & resistance levels for Litecoin
On this chart (the period from September 2021), I marked the main support and resistance levels that can help traders to understand where the price could move. The more often price tests a level of resistance or support without breaking it, the stronger the area of resistance or support is. When the price passes through the resistance, that resistance could potentially become support. Litecoin remains in the “bearish phase, “but if the price advances above $80, it could be a sign of the trend reversal, and the next target could be located around $100. The current support level is $55, and if the price breaks this level, it would be a “SELL” signal, and we have the open way to $50. If the price drops below $50, which represents very strong support, the next target could be located around $40.
What speaks for the rise in the Litecoin price
Litecoin has surged more than 10% since the beginning of July, rising from $50 to a high of $61.77. The sudden upswing took Litecoin to test the $61 level multiple times, but it did not show enough strength to stabilize above it.
Many surveys show that institutional investors still remain bearish on Litecoin, and it is important to say that the bearish sentiment towards Litecoin has not been relegated to just institutional investors alone. The spot markets are also feeling the heat as sell-offs have resumed, and in light of this, Litecoin might have a hard time holding above the $50 level.
Litecoin remains in the “bearish phase, “but if the price advances above $80, it could be a sign of the trend reversal, and the next target could be located around $100. Traders should also consider that the price of Litecoin is correlated with Bitcoin, and if the price of Bitcoin jumps above $25000, we can see Litecoin at $65 or even $70.
What indicates further downfall for Litecoin
Economists have warned that a global recession could be on the horizon, and the consensus appears that the price of Litecoin will drop again. The price has stabilized now above $50 support, but a break below this level would indicate that Litecoin could probably test the important support level that stands at $40. The price of Litecoin is correlated with the price of Bitcoin, and when the price of Bitcoin drops, that usually has a negative influence on the price of Litecoin.
Litecoin price expectations from analysts and experts
Many analysts and experts still remain bearish on Litecoin despite a huge sell-off in the last several months. The third quarter of 2022 will likely be a tough period for Litecoin, and according to Mike Novogratz, CEO of Galaxy Digital, cryptocurrencies could decline more than 50% from the current prices. Grayscale’s “Bear Markets in Perspective” report claims that the current bear market may continue for another 250 days, while Daniel Cheung, Co-founder of Pangea Fund, thinks that the worst month for cryptocurrencies could be August.
American investor Jeffrey Gundlach said that he would not be surprised to see Bitcoin at $10,000, and if this happens, we would see Litecoin (LTC) below $30. Jeong Seok-moon, the head of South Korean exchange Korbit, said that crypto winter could end before the end of 2022, but he also thinks that the US Federal Reserve’s attempts to fight high inflation would continue to influence crypto markets in the meantime.