As Bitcoin price struggles to maintain its momentum above the crucial $28,000 mark, it is triggering a sell-off in leading altcoins. The ‘Uptober’ trend appears to be fading as leading altcoins, including LTC, are flashing red, signaling potential dips after validating a bearish pattern. With several on-chain data now pointing to bearish signs, LTC price appears poised for another wave of selling pressure.
Litecoin’s long/short ratio is nearing the dip
Following a drop in the LTC price of $68, buyers rushed to sell their positions to avoid further losses. Coinglass data shows that nearly $1.6 million in long positions were liquidated in the last 48 hours. This activity has gradually strengthened the resistance level, paving the way for sellers to potentially profit from the trend reversal.
Furthermore, Litecoin trading interest has declined, evidenced by a sharp decline in the Open Interest (OI) metric. The OI metric plummeted by more than $11 million in the past 24 hours as LTC’s declining volatility struggled to capture market interest. Data from IntoTheBlock indicates a downturn in LTC volatility, which has been gradually decreasing for more than a week, from a high of 38.4% to a low of 31.9%. This has emerged as a primary factor in Litecoin’s price decline.
Nevertheless, after the LTC price reached the $63 mark, a boost in confidence among long position holders was observed. The long/short ratio indicates an upside and is currently trading at 0.9897, indicating a fierce battle between bulls and bears. Currently, bulls are asserting their dominance with 49% long positions, while bears respond with 51% short positions. Consequently, LTC price has managed to maintain steady momentum below the $65 threshold.
What’s next for LTC pricing?
Litecoin price rose above $68 but failed to meet buyers’ expectations as sellers exerted intense pressure close to this high. As a result, the LTC price fell and buyers tried to maintain the momentum around $65, but failed due to the increasing dominance of sellers. At the time of writing, the LTC price is trading at $64.1, down more than 2.7% in the last 24 hours.
Normally, the emergence of a bearish setup is viewed positively as bulls, who were previously on standby, seize the opportunity to buy. After Litecoin hit the $63 dip, buyers bought in and pushed the price above the 23.6% Fib channel. However, the price could drop quickly and retest the $62 breakout level before any significant upward move occurs.
If the $62 level holds, it would indicate that bulls have successfully turned the region into strong support. Therefore, Litecoin price could initiate an upward trajectory towards $65 and possibly further to $68 if it recovers successfully.
Conversely, if the price declines and falls below the initial bearish zone, it could indicate that the markets have rejected the higher levels. The price could then reach the crucial support at $57.