The Litecoin price is deeply in correction territory as the overall crypto sell-off accelerates. The LTC has dropped in the past seven consecutive days and is down by more than 32% from its highest level last week. Its market value has crashed to more than $14.97 billion.
Why Litecoin price dropped: The LTC price has declined sharply after it rose to an all-time high of $335 last week. There are several reasons that explain this sell-off. First, there is relatively no catalyst after the recent Coinbase direct listing.
Second, the price got significantly expensive too fast. Indeed, before this crash, Litecoin was up by more than 175% this year alone. This is still below the performance of other currencies like Dogecoin and Ripple.
Third, the Litecoin price has dropped because of the overall weakness in Bitcoin prices. BTC has dropped by more than 25% in the past few days and is currently below $50,000. In most periods, the major currencies usually have a close correlation.
Fourth, LTC price has declined because of central bank decisions. This week, the Bank of Canada started tightening. While the Fed has said that it won’t tighten soon, there are chances that the strong fundamentals will push it in that direction.
Finally, there are concerns about tough regulations and higher capital gains taxes in the United States.
Litecoin price prediction
The daily chart shows that the LTC price has been in a steep downward trend recently. This has seen it drop below the 38.2% Fibonacci retracement level. It is also between the lower and middle lines of the Bollinger Bands. The bands themselves have widened, which is a sign that volatility is increasing.
Therefore, in my view, while the correction is continuing, the LTC remains in a bullish trend. Further declines will be confirmed if bears manage to push it below the 50% retracement level at $188.