Litecoin Open Interest Declines Since January, $50 Support at Risk

▲ Litecoin (LTC)

As Litecoin’s (Litecoin, LTC) 9-day simple moving average (SMA) has fallen below its 50-day line, deepening its technical bearish phase, the likelihood of further decline toward the psychological support level of $50 is increasing.

According to cryptocurrency media outlet U.Today on Feb. 19 (local time), Litecoin has been posting losses this week, trading below $54. Derivatives data also supports a pessimistic outlook. Open interest has steadily declined since mid-January, dropping to approximately $341.27 million. This decrease indicates reduced investor participation, while growing short positions betting on price declines reflect heightened market caution.

The long-to-short ratio, which reflects traders’ sentiment, recorded 0.98, remaining below the baseline of 1 for the third time this month. This suggests that market participants are highly reluctant to add new long positions and that a pessimistic sentiment anticipating further price declines is dominant. From a technical perspective, the 9-day SMA stands at $54.14, well below the 50-day SMA of $66.99. Both indicators are trending downward, signaling that sellers maintain control of the market.

The Relative Strength Index (RSI) stands at 33, entering the bearish zone from neutral territory and reflecting significantly suppressed demand. Although the MACD line remains above the signal line, the histogram has begun to contract, indicating that bullish momentum is fading rapidly. The 38.2% Fibonacci retracement level at $54.78, drawn from the high of $70.49 to the low of $45.07, is acting as the first resistance level. Even if this level is breached, the 50% Fibonacci retracement level at $57.78 is expected to cap further recovery attempts.

On the downside, the key weekly support level at $50.39 has emerged as a critical defense line. If Litecoin manages to reclaim $54.78 on a daily closing basis, it could escape immediate downward pressure and secure room for a rebound toward $57.78. However, failure to overcome this resistance barrier would likely shift market focus back to the $50.39 support level, with the overall bearish bias expected to persist.

Litecoin is currently navigating a precarious path amid dual challenges of macroeconomic uncertainty and deteriorating technical indicators. Market analyst Manish Chhetri noted that the current technical setup is tilted in favor of sellers, suggesting that holding the $50 level will be a decisive factor in determining short-term direction. Investors should closely monitor changes in open interest and price movements near key Fibonacci retracement levels while establishing cautious response strategies.

Disclaimer: This article is for investment reference purposes only, and we are not responsible for any investment losses based on it. The content should be interpreted solely for informational purposes.