Litecoin could drop to $30 after suffering a dramatic downturn that leaves bulls teetering perilously close to the $50 mark.
The altcoin is down 6% in the past 24 hours and nearly 20% off weekly highs as Bitcoin’s slide below $67,000 drags the broader cryptocurrency market into turmoil.
According to analysts, this sharp decline in LTC price comes amid macroeconomic headwinds and shifting investor sentiment.
Litecoin dumps amid BTC sell-off
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As noted, LTC fell as Bitcoin’s price broke below support at $67,000.
The flagship digital asset has continued to fall since broader risk aversion following Kevin Warsh’s appointment as the next Federal Reserve Chair.
Weak US labour data, as seen in the private payrolls for January, has also fueled the downside action.
Adding to the pressure are reports of the government of Bhutan’s offloading of BTC.
Meanwhile, fading institutional interest has also impacted the outlook as investors pull billions of dollars from digital asset investment products.
Bitcoin’s dump amid these factors accelerated Litecoin’s crash below $100.
“At $67,400, more than 9.3 million bitcoins are underwater,” digital asset research and analytics platform Glassnode noted on X.
“This is the highest level since January 2023,” the post pointed out.
Julio Moreno, head of research at CryptoQuant, says Bitcoin could drop to $60,000, with this likely to “take a few months.’
The forecast relates to weak investor demand as BTC breaks below its 365-day MA, the first time it has happened since March 2022.
Lark Davis, a respected market analyst, said the RSI almost mirrors the COVID crash levels.
Is Litecoin set for new lows?
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Litecoin’s break below $100 emboldened bears, and long liquidations have increased since as bulls are caught off-guard time and again.
The coin’s $50 is a key support level, but any deeper correction may bring June 2022 lows of $40 into play as support.
If LTC bulls fail to reclaim immediate demand zones, prices could subsequently revisit lows of $33. Litecoin last traded at these levels in March 2020.
Despite the bearish outlook and notable price declines, the cryptocurrency that launched in 2011 and took on the moniker of silver to bitcoin’s digital gold continues to see growth.
Earlier in the week, the network surpassed 375 million transactions.
“Litecoin’s remarkably consistent Daily Active Address performance showcases its reliability,” the Litecoin Foundation wrote.
According to the nonprofit dedicated to supporting LTC adoption, the DAA growth reflects “both user loyalty and the potential for future growth.”
Litecoin is getting increased usage every day, because it “just works,” they added.
In the bulls’ favour could also be the anticipated flip in ETF demand when markets turn bullish.
That’s regardless of investors showing caution over the past month.
On Feb. 4, SoSoValue data indicated flows into Litecoin ETFs hit a daily net inflows of $144,500, with cumulative net inflows since the first LTC spot ETFs launched in the US hitting $9.92 million.
