The Litecoin pricehas been among the worst-performing crypto majors in the past few days. It has dropped by more than 26% in the past seven days while Ethereum and Ripple have fallen by 24% and 20%, respectively. This decline has brought its total market cap to more than $11.3 billion, making it the eighth-largest digital currency in the world.
What happened: The ongoing sell-off of the LTC price is because of the overall underperformance of the crypto sector. In the past few days, most cryptocurrencies have fallen sharply after Janet Yellen criticized Bitcoin. Also, a statement by Elon Musk that Bitcoin and Ether were expensive turned many investors off.
Litecoin price is also falling because of the rising Treasury yields in the United States and other developed countries. High yields tend to be a sign that investors have high expectations for inflation and interest rates. As a result, many investors are now moving from the relatively riskier assets, including technology companies.
Turning to the daily chart, we see two things. First, the LTC price has formed an ascending channel and is currently near its lower side. Second, during the current decline, the price has remained above the 100-day EMA. It has also struggled to move below the 50-day EMA.
Therefore, in my view, while there is a major risk of more weakness, the price is still in an overall bullish trend. Traders should watch out for any moves below the lower side of the channel at this week’s low of $160. The next key danger point to watch is the 100-day EMA at $142. If it moves below these two, it will send a signal that bears are in control and that more weakness could be ahead.