Throughout the month, the Litecoin price has traded within a very narrow price range of between $50 and $55. Today, the price is showing a continuation of the sideways market and is already up by a percentage point and poised to wipe out yesterday’s 2 per cent price drop.
There have been a number of reasons why we have seen Litecoin trend sideways, including its significant correlation with Bitcoin. For months now, Bitcoin has also failed to establish a trend and instead has seesawed around the $20,000 price level. Litecoin, which is forked from Bitcoin, often trends in the direction of Bitcoin due to correlation. With Bitcoin struggling in the markets, Litecoin has been dragged in a sideways market, which it has been stuck in for the past few weeks.
The second is the current macroeconomic environment, including the rising Fed rates and the bearish stock market. Although true that macro factors such as inflation rarely affect the crypto market because it is not tied to inflationary pressures, investors’ fear and greed index show the current reading is fearful due to these factors. Therefore, they have also become cautious about investing in altcoins such as Litecoin, reducing its trading volume and also contributing to the current choppy markets.
Litecoin Price Prediction
As indicated above, Litecoin is significantly influenced by market factors far beyond its control. Today, with prices already up by a percentage point, Litecoin price action continues to mirror Bitcoin, which is also up today.
On the technical analysis side of things, I expect Litecoin’s price to continue trading sideways in the next few trading sessions. Prices will continue trading within the narrow range of $50 and $55. There is a high likelihood that we might continue to see gains made in the coming sessions wiped to maintain the trading range.
However, a move below the $50 price level will signal a bearish trend and invalidate my sideways analysis. A move above the $55 price level will also invalidate my analysis and signal a bullish trend.
Litecoin Daily Chart
