Traders Abandon Long Bets… Litecoin (LTC) on the Brink of $50

▲ Litecoin (LTC)

Litecoin (LTC) has fallen more than 3% this week, slipping below $54, as cooling investor sentiment in the derivatives market combined with weakening technical indicators have raised warning signs that the price could decline to $50.

According to investment media outlet FXStreet on February 19 (local time), Litecoin continued its downward trend on Thursday, trading below $54. Derivatives data, including a sustained decline in open interest and an increase in short positions, strongly supports the bearish outlook.

Indicators in the derivatives market clearly show investors exiting the market. Litecoin futures open interest has steadily decreased since mid-January, shrinking to $341.27 million as of Thursday. The long-to-short ratio, which reflects trader sentiment, stands at 0.98, marking the third time this month it has failed to surpass 1. A ratio below 1 suggests that market participants are betting on price declines and are reluctant to enter long positions.

Technical indicators also reinforce the dominance of sellers. As of Thursday, Litecoin was trading at $53.28, with the 9-day simple moving average at $54.14 positioned below the 50-day simple moving average at $66.99, both sloping downward and signaling a clear bearish structure. Although the Moving Average Convergence Divergence (MACD) line remains above the signal line and the zero line, the histogram has begun to contract, indicating fading upward momentum. Meanwhile, the Relative Strength Index (RSI) stands at 33, remaining below the neutral level and reflecting weak demand.

Analysts have identified $54.78, the 38.2% Fibonacci retracement level drawn from the high of $70.49 to the low of $45.07, as the first resistance level. Even if this level is broken, the 50% retracement level at $57.78 is expected to cap the next rebound. On the downside, the weekly support level is seen at $50.39.

In conclusion, Litecoin must close above $54.78 on a daily basis to escape immediate downward pressure and gain room for a rebound toward $57.78. However, if it fails to break through this key resistance barrier, market focus is likely to shift to testing the lower support at $50.39, with the broader bearish trend expected to persist.

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