Is Litecoin due for a cooling off after the recent rally? Findings suggest…
Litecoin [LTC] just concluded a bullish week during which its price action almost pushed to a new monthly high. However, LTC bulls are already running low on the momentum which means that last week’s upside might be cut short.
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LTC managed to push as high as $96.11 on 24 March. It traded at $92.16 after a slight pullback by almost 5% in the last two days.
The pivot was also slightly shy of the $98 resistance level. A closer look at the price movements reveals that the pivot occurred after the price of Litecoin briefly pushed above the 50-day moving average.
Source: TradingView
It is to be noted that Bitcoin’s [BTC] RSI managed to push above the 50% level but, at press time, it had already leveled out. This was a sign that the probability of a continuous upside just got a bit lower.
The most likely reason for the untimely return of sell pressure is that Litecoin is still heavily correlated to Bitcoin. This means LTC’s price action will likely be more influenced by the overall market tide rather than by organic demand.
Litecoin’s potential pullback will depend on whether sellers have enough incentive to offload some of their holdings.
For example, LTC’s 60-day MVRV ratio confirms that quite a substantial number of holders are now in profit. A sizable retracement is on the cards if most of those holders are incentivized to sell.
Source: Santiment
Litecoin’s weighted sentiment also pivoted, confirming that traders, at press time, were changing their minds about the cryptocurrency. In other words, bearish expectations were rising.
Sell pressure remained low as indicated by a lack of a strong surge in volume.
Source: Santiment
There was one major observation regarding
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