Litecoin is on a corrective rebound after hitting a one-month low earlier in the session. However, its gains may be curbed by Jerome Powell’s testimony before the US Congress later in the day. The Fed Chair’s remarks will come a week after the Fed’s hawkish surprise. The bank’s shift in its policy outlook strengthened the US dollar while acting as a bearish catalyst for riskier assets like cryptocurrencies.
Litecoin is also reacting to China’s heightened efforts to crackdown on crypto trading. the Middle Kingdom has prohibited financial institutions from offering crypto-related services. According to Global Times, which is a newspaper backed by the ruling Communist Party, over 90% of the country’s bitcoin mining capacity is likely to be halted. This comes after authorities in Sichuan ordered the pausing of crypto mining.
Litecoin technical outlook
Litecoin is on a rebound after extending its previous session’s losses earlier on Tuesday. At the time of writing, LTC/USD was up by 4.41% at 130.19. Earlier on, it has dropped to 120.07, which is its lowest level since 23rd May. After getting into the oversold territory with an RSI of 26, it has made a corrective rise to find resistance at 131.07.
I expect Litecoin to continue finding some resistance at 131.07 ahead of Powell’s testimony. The bulls may manage to push the price to 134.66, which is along the 25-day EMA, before pulling back. A further decline from its current level may have the bears retest Tuesday’s intraday low of 120.07. On the flip side, a surge past 134.66 will have the bulls target the level along the 50-day EMA at 141.01.