Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- US SEC has not categorized LTC, but CFTC listed it as a commodity in March.
- Long positions are not recommended.
The United States SEC lawsuit against Binance for securities law violations has sent the market into a sharp correction. Another CFTC declaration picked against Binance in March Litecoin [LTC], Ethereum [ETH], Bitcoin [BTC]And BinanceUSD [BUSD] as were.
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While the recent US SEC is similar to the earlier CFTC filing, LTC has not been named as a security. At the same time, MATIC, SOL, ADA and more have been selected as securities.
LTC is down 6% in the past 24 hours, trading at $87.5 at the time of writing. Similarly, BTC fell below $26k as investors reacted to the news.
Will sellers push lower?
Source: LTC/USDT on TradingView
With BTC weak and an upcoming FOMC meeting in mid-June, LTC could reverse May gains as sellers intensify scrutiny. In particular, the RSI (Relative Strength Index) retreated into the oversold zone, indicating increased selling pressure.
As such, LTC could break the $84 support and drop into the $74 – $78 (cyan) demand zone. The demand zone is also a bullish order block (OB) formed on March 13 on the 4-hour chart.
From a bullish angle, a recovery attempt could be likely if the USD 84 support holds. In particular, the accumulation/distribution indicator has risen steadily since the end of May, indicating an accumulation trend.
Therefore, LTC could overcome the $89 hurdle and retest $95, especially if BTC reclaims $26,000. In addition, the weekly chart was still bullish despite retreating to a near-neutral position at press time.
Long positions are not recommended
Source: Coinglass
How many Worth 1,10,100 LTCs today?
In the space of 4 hours, LTC saw more than $80,000 in long positions perish compared to about $20,000 in short positions. It means that the liquidation of long positions was four times the size of short positions, reiterating the bearish short-term outlook for LTC in the futures market.
Next week’s likely rate hike by the Fed could make a strong rebound elusive for LTC bulls. As such, tracking BTC’s movement is crucial before moving forward.