After losing 69% in 10 days, in what can only be described as a bloodbath, many will be wondering if the litecoin price can ever recover.
After the sell-off earlier in the week, there seemed to be some signs of stability returning to the cryptocurrency market. Bitcoin had held around $48,000, Ethereum seemed to be finding some buying in the $36,00 to $38,00 range.
When trading started yesterday, the Litecoin price was already down 30% from its 10th of May high of $413. This no doubt brought some bargain hunting buying around the $300 level, which looked to be holding,
However, traders that bought the dip soon realized that the real dip had only just started.
Driven by mass liquidation across the whole crypto complex, LTC was down a staggering -57% at its low point of $125.00 yesterday. The collapse saw the price slide through two major supporting trend lines with ease.
Trading volume was the largest on record, with over 66 million coins changing hands. The Litecoin price did manage to recover later in the day, bouncing 25% from the low to $189.00.
However, this will be of little comfort to investors that had only recently entered the market.
Litecoin Price Outlook
It’s very difficult to say what comes next for LTC. There are two schools of thought after a market crash.
The lower price may well entice new money into Litecoin. Especially investors with a long-term view of the coins’ prospects.
However, a lot of investors will have lost money on the move lower and may not return for a while.
The daily chart shows two important trend lines. The first, from the 12th of December low, was previously support, at $222. The second trend is below the market at $150.00 and has been in place since October 2020.
The Litecoin price is trading at $189.00 and between the two trend lines and depending on which one the price crosses next might indicate if the worst is over for now.
If the price can recover above the trend at $222.00, it might signal that further gains are possible.
Alternatively, if the price breaks below the lower trend line at $150, there is potential for a deeper decline. This could lead to LTC trading down to the December high of around $90, wiping out all of 2020’s gains.
At this stage, I would suggest traders take a step back and let the dust settle before making a decision.