Analyst predicts sharp decline for Litecoin

Litecoin (LTC) price is facing a critical juncture as the cryptocurrency struggles to break above the 50-day Exponential Moving Average (EMA) situated around $66. According to cryptocurrency technical analyst Manish Chhetri, Litecoin could be headed for a significant drop if it fails to break above this technical barrier.

“Litecoin is trading within a falling wedge pattern that has been forming since mid-April and is facing crucial resistance at the 50-day EMA,” Chhetri said.

According to the analyst, if LTC fails to close above this level, there is a real risk of a further decline, possibly around 9%, to test the weekly support at $56.00.

Chhetri’s analysis is supported by key technical indicators such as the Relative Strength Index (RSI) and the Awesome Oscillator (AO), both of which are trading below their neutral levels of 50 and zero, respectively.

He points out that these indicators suggest weak momentum for Litecoin, which could indicate an imminent bearish trend.

Litecoin Analysis

Furthermore, on-chain data from Coinglass platform reveals that Litecoin’s long-to-short ratio is at 0.94. This indicates a bearish sentiment among traders.

“A ratio below one suggests that more traders are betting on Litecoin falling than rising, reinforcing the negative outlook for the asset in the short term,” Chhetri highlighted.

However, despite the seemingly bleak outlook, Chhetri also pointed to a possible turnaround. As he highlighted, if Litecoin’s price manages to close above $68.80 on a daily candlestick, it could invalidate the bearish thesis and propel the asset to a rally of up to 11%, revisiting the peak of $76.78 recorded on July 29.

According to the analyst, a close above this level would indicate a higher high on the daily timeframe. This could attract buyers back into the market and reverse the current trend.

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