Litecoin – H&S Points to More Weakness
Litecoin price dropped today as sentiment in the cryptocurrency industry soured. The LTC price is off by more than 2% and is trading at $133. Similarly, other cryptocurrencies like Bitcoin, Ethereum, and Ripple have dropped by 9%, 8%, and 6% in the past 24 hours. Chainlink price has dropped by more than 10% making it the worst-performing crypto major.
The background: Chainlink and Litecoin are the 7th and 8th largest cryptocurrencies in the world with a market cap of more than $8.9 billion and $8.8 billion, respectively. The two have been among the best performers in the past few weeks. Chainklink’s goal is to let smart contracts interact with the outside world. On the other side, Litecoin is an open-source peer-to-peer cryptocurrency.
What happened: There is no single reason why the Chainlink and Litecoin price is falling today. As I wrote earlier today, the decline is possibly because a report by JP Morgan found that investor demand for Bitcoin was waning. The analysts analyzed inflows of the Greyscale Bitcoin Trust.
Another reason why cryptocurrencies are falling is that Janet Yellen was confirmed as Treasury Secretary yesterday. In her confirmation hearings, she said that there was a need to curtail cryptocurrencies. This could be done by having strict KYC and AML policies against wallets.
Also, there are rumours that a Bitcoin ETF will soon be allowed. As a result, more investors in the expensive Greyscale will move their resources to the cheaper ETF. In most periods, other cryptocurrencies like Litecoin and Chainlink tend to react to the performance of BTC.
Chainlink price prediction
On the four-hour chart, we see that the Chainlink formed a double-top pattern at its ATH level at $26.00. Since then, the price has moved below the 25-day and 15-exponential moving averages while the Relative Strength Index (RSI) has formed a bearish divergence pattern. The price also seems to be forming a head and shoulders pattern. Therefore, while the Chainlink price will likely bounce back, there’s a possibility of a further decline to $20.
Litecoin price prediction
The four-hour chart shows that the Litecoin price has been in a downward trend. It is trading at $133, which is lower than this week’s high of $147. The pair has also moved below the 15-day and 25-day EMAs while the RSI has continued to drop. Like Chainlink, the pair has also formed a head and shoulders pattern, meaning that a more severe drop is possible before the weekend.
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LTC price chart