Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the writer.
- LTC fell below its ascending channel.
- LTC price consolidation could persist through the weekend but will turn around early next week.
Litecoin [LTC] it bottomed out at $61 in December 2022, but rose to $93 in January 2023, posting gains of around 50%. The January rally continued Bitcoin [BTC] Impressive performance as it jumped from $16k to $23k.
Read Litecoin [LTC] price prediction 2023-24
At press time, LTC value was $87.23, with fundamentals suggesting a near-neutral structure. LTC could fluctuate and consolidate within this range over the weekend before definitive price action following next week’s FOMC (Federal Open Market Committee) announcement.
LTC price consolidation could briefly extend into the $82-$93 range
LTC’s uptrend since late December 2022 marked an ascending (white) channel. But the bullish momentum faced two key challenges. The first challenge occurred in mid-January after a prolonged price consolidation temporarily took LTC out of the ascending channel. The support level of $82.44 held the slide and helped LTC to rally and retest the mid-channel line around the $90 level.
The second challenge came after LTC faced price rejection at $92.27, which led to a correction that saw the asset drop below the ascending channel. LTC has been fluctuating between $87.23 and $92.27 for the past seven days. The above price consolidation could persist through the weekend and change early next week, depending on how BTC reacts to the FOMC release.
A likely bullish BTC could see LTC break above the $92.27 level and return to the ascending channel. Such a move could push LTC to the $100 zone.
But a bearish BTC would see LTC drop below $87.23 and retest the $82.44 support, invalidating the forecast outlined above.
LTC’s RSI was 53 on the 12-hour chart, with a possible rejection and bounce from the mid-50 level based on historical patterns. Therefore, the LTC consolidation could continue through the weekend.
LTC open interest fluctuated as holders’ earnings declined
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According to data from Coinglass, LTC’s open interest (OI) rates declined in mid-January before fluctuating afterwards. However, at press time, LTC posted a slight increase in OI, showing that more money was moving into its futures market, a trend that could fuel its uptrend momentum.
On the other hand, price fluctuations reduce holders’ gains. According to Santiment, the 30-day MVRV decreased from 20% to 6%; therefore, short-term holders’ gains were reduced by more than 10%. The drop also caused investors to take a somewhat bearish view, as evidenced by the negative sentiment.