Similar to Bitcoin and other major cryptocurrencies, Litecoin is extending its correction on Tuesday, and is now trading below $51.
The coin is down 4% in the last 24 hours, with the bearish price action supported by derivatives data.
Litecoin’s Open Interest (OI) has been falling steadily alongside rising short bets, suggesting waning retail participation.
The technical indicators are also extremely bearish, adding further confluence to the current market conditions.
LTC’s derivatives data shows bearish bias
The cryptocurrency market has been bearish since the start of the week, with Bitcoin dropping below the $63k level earlier today.
The dip caused nearly $400 million worth of leveraged positions to be wiped out from the market, most of them long positions.
LTC, the native coin of the Litecoin network, is also underperforming.
It is down 4% in the last 24 hours and now trades around $50.65.
The bearish performance is supported by Litecoin’s derivatives data.
Litecoin’s futures OI has declined to $329 million on Tuesday, having been steadily declining since mid-January.
This decline indicates waning investor participation and projects a bearish outlook.
Furthermore, LTC’s long-to-short ratio reads 0.94 on Tuesday, the third time it has declined below one since the beginning of February.
The decline signals that traders are reluctant to add long positions, thanks to the market conditions.
Furthermore, it also indicates bearish sentiment as traders are betting on the Litecoin price to fall.
Litecoin price forecast: will Litecoin retest the $45 support level?
The LTC/USD 4H chart is bearish and efficient, similar to the other leading cryptocurrencies.
At press time, LTC is trading below the 50-day Exponential Moving Average (EMA) of $62.36, maintaining a bearish bias.
Recoveries remain capped below this average, making it harder for the bulls to push LTC’s price in the near term.
The 4-hour chart shows that the Moving Average Convergence Divergence (MACD) line is below the signal.
The negative histogram indicates a growing bearish momentum.
The Relative Strength Index (RSI) at 39 stays below the midline, indicating persistent bearish pressure near oversold territory.
Currently, the 23.6% Fibonacci retracement at $51.06 acts as immediate resistance.
If the daily candle closes above this level, the bulls could push higher towards the $54.78 Inducement Liquidity (ILQ) over the next few hours or days.
The major resistance at $61.62 could prove a challenge for the bulls in the near term.
However, if the daily candle closes below the $50.39 support level, LTC could extend the slide within the prevailing downtrend toward the February 6 low of $45.07.
Currently, the market conditions are bearish, supporting further downward movement.
With no major fundamental news on the horizon, LTC’s move could be determined by retail participation over the next few days.
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