Long-Short Ratio Falls to 0.94 as Traders Pile Into Bets on Litecoin’s Decline

▲ Litecoin (LTC)

Amid extreme investor sentiment deterioration in the derivatives market and a wave of heavy sell-offs, Litecoin (LTC) is on the brink of plunging to the $45 level.

According to investment media outlet FXStreet on February 24 (local time), Litecoin extended its prolonged correction phase, slipping below $50.50 after falling around 4% the previous day. A steady decline in open interest combined with an increase in short positions is intensifying downward pressure.

Derivatives data clearly supports this bearish market outlook. Open interest in Litecoin futures has been on a persistent downtrend since mid-January, shrinking to $328.6 million. This suggests a noticeable drop in investor participation and drying market liquidity.

The long-to-short ratio also stood at 0.94, failing to surpass the 1 mark for the third time this month. This is a strong bearish signal indicating that traders are hesitant to enter long positions and are instead increasingly betting on price declines through short positions.

Technical indicators likewise point to complete control by sellers. The 50-day exponential moving average is trending downward at $62.36, reinforcing a bearish bias, with rebound attempts repeatedly capped below this resistance level. Although the daily MACD line remains near the zero line above the signal line, the contracting positive histogram warns that even the remaining bullish momentum is fading. The 14-day Relative Strength Index stands at 32.26, hovering near oversold territory and confirming persistent selling pressure.

The $51.06 level, corresponding to the 23.6% Fibonacci retracement from the recent high of $70.49 to the low of $45.07, is acting as immediate resistance. Even if this level is breached, further gains are likely to face resistance at $54.78, the 38.2% retracement level. Experts warn that if the current support at $50.39 breaks on a daily closing basis, Litecoin could slide steeply toward $45.07, the bottom recorded on February 6.

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