Litecoin’s price rally stalled at $60 on August 9, recovering 25% from Monday’s historic plunge. However, key resistance and a sell-off now threaten to halt LTC’s recovery phase.
LTC Price Reaches $60 After 25% Growth
Litecoin (LTC) has seen a sharp recovery over the past four days, rebounding nearly 25% from the August 5 market crash. The initial decline saw LTC prices fall below $50, one of the sharpest declines in recent weeks. However, a number of bullish catalysts have provided significant support, pushing the price back into the $60 range.
The most notable factor that impacted LTC’s price was the renewed interest in crypto ETFs, which led to a new influx of funds into the market. Additionally, the $125 million fine levied against Ripple by the Securities and Exchange Commission (SEC), while initially seen as bearish for the broader crypto market, gave confidence to Litecoin investors, who interpreted it as a sign of regulatory clarity.
Moreover, Russia’s decision to legalize cryptocurrency mining has reinforced positive sentiment, creating a favorable macroeconomic backdrop that has stimulated purchasing activity.
However, as LTC approached the $60 level, it encountered significant resistance, as seen on the TradingView chart. The price struggled to break above this level, and bearish pressure began to assert itself again, leading to a small pullback. This resistance zone proved to be a formidable barrier, halting the momentum of the recent rally and keeping traders cautious.
Negative LTC Funding Rate Suppresses Optimism
While the recent growth has been encouraging, the negative funding rate for LTC is a worrying sign that could dampen the optimistic sentiment.
The funding rate chart shows that on August 9, the Open Interest-Weighted Funding Rate dropped to negative -0.0013%, which coincided with LTC’s price stalling around the $60 mark.
Historically, when a large-cap asset like LTC experiences a significant pullback from a key resistance level during a broader market rally, it often indicates bearish tendencies in the derivatives market.
The persistent negative funding rate suggests that short positions continue to outweigh longs, reflecting the fact that the bears who were in control just days ago still hold significant positions at key price levels.
It is likely this dynamic that has caused LTC to experience resistance at $60 as bears defend these levels to prevent further gains.
Despite recent bullish catalysts, the underlying market sentiment reflected in the funding rate points to a potential challenge in maintaining the upward momentum. If the negative funding rate persists, it could signal a broader bearish trend, leading to further consolidation or a possible correction in LTC price.
Traders should keep a close eye on these levels as failure to break above $60 could see LTC revisiting the lower support zones in the coming days.
LTC Price Prediction: $60 Breakout Could Spark More Growth
Litecoin price is currently hovering near the critical resistance level of $60, and technical indicators suggest that a break above this level could potentially open the door for further gains.
The daily LTC/USD chart shows that after a sharp drop to $50, LTC has managed to recover 25%, bouncing back strongly over the last four days. This recovery is highlighted by the Donchian Channel, which shows that the price has moved from the lower boundary to the middle and upper boundaries, indicating that bullish momentum is increasing.
The Chop Zone (CHOP) indicator is currently at 33.07, which suggests that the market is trending after a period of consolidation. This indicator supports the idea that if LTC can break above the $60 resistance level, it could gain enough momentum to move towards the next significant resistance level around $63.39.
However, it is important to note that this level has previously acted as strong resistance, and traders should watch for potential profit taking if LTC approaches this area.
On the other hand, the $57 support level is crucial to maintain the bullish outlook. A drop below this level could signal a potential reversal and expose LTC to further declines, possibly retesting the $50 psychological support level. However, as long as LTC holds above $57 and the current upward momentum continues, the outlook remains cautiously bullish, with the potential for a breakout above $60 to lead to further gains.
In summary, Litecoin’s price action suggests that a successful breakout above the $60 resistance level could pave the way for additional upside potential. Traders should keep a close eye on the $63.39 resistance and $57 support levels as they could provide critical information about LTC’s future direction in the short to medium term.
