Litecoin Drops Steeply As China Announces Renewed Crypto Crackdown
Litecoin continues to tank further on the day as the People’s Bank of China announces a renewed crackdown on cryptocurrency trading in Shanghai. Speaking via its Shanghai office, the PBoC says it identified hundreds of illegal exchanges defying its previous crypto ban, and was launching this crackdown a day after similar raids in Shenzhen were conducted.
Litecoin was the first analogue of Bitcoin, and shares a strong positive correlation to Bitcoin. LTCUSD has therefore experienced the same steep drop that Bitcoin has experienced on the news. LTCUSD is currently trading at 47.10, after falling from this week’s high of 59.69.
Bearish price action on Litecoin commenced last week, but after the break of the rising channel over the weekend, things went south really fast for LTCUSD as it pushed down from the broken support at 59.69, cleared through support levels at 54.45 and 51.65 and is now testing the current support at 47.06.
If the relentless selloff continues, this would lead to a breakdown of 47.06 and cause LTCUSD to target the next support in line at 40.54 (previous high of Dec 2018 and January 2019 in role reversal). Further breakdown of this level targets July and September 2017 lows at 34.85.
On the flip side, price revovery from whale buying could lead to a retest of 51.56, 54.45 and 59.59, in that order. Only a break of 59.69 will temporarily suspend the near-term bearish bias on LTCUSD, which brings Oct 21 and Nov 11 highs of 63.66 into focus. Above this level, further resistance lies at 70.36 (previous low of August 19) and 78.21.More content