Litecoin Stalls Ahead of FOMC Minutes
• Litecoin [LTC] faces bearish pressure ahead of FOMC minutes and BTC options expiring on 26 May.
• LTC rallied over 20% between 12-17 May but has cooled off at $95.
• The Relative Strength Index (RSI) shows selling pressure increasing while demand and volume for LTC decline.
Rally Cools Off Ahead of Events
Litecoin saw a strong rally last week, rising from $77.7 to $95.1, before cooling off ahead of the FOMC minutes and a considerable number of BTC options expiring on 26 May. Despite signs of declining correlation, LTC still succumbed to BTC’s whipsawing as sellers depreciated the asset below $90 at press time.
Support Levels in Focus
Sellers gained entry at the resistance level of $95, which was sticky in late March and early April. Price action is now approaching another key support level of $85, where bulls could have a chance if it doesn’t crack. Meanwhile, the Relative Strength Index (RSI) headed to the oversold zone while On Balance Volume (OBV) dropped significantly – highlighting selling pressure increasing while demand and volume for LTC decline.
Futures Market Showing Bearish Sentiment
Coinglass’s liquidation data showed over $1.5 million worth of long positions liquidated in the past four hours alone with less than $3k short positions being wrecked – painting a bearish short-term outlook for LTC’s futures market. This sentiment could intensify in the spot market if BTC remains below $27k and support levels are cracked by sellers attempting to gain more gains from their position(s).
Bulls vs Bears
Bulls will only gain an upper hand if they push LTC above its current resistance level of $95 and cross the psychological mark at $100. Conversely, sellers can extend recent losses should they break through the support level near $85 with any further depreciation bringing prices down towards a bullish order block near $74 – effectively invalidating recent gains since mid-May 20203