Litecoin price continued its downtrend and tested the 100-day moving average as cryptocurrencies plunged. LTC, which has already fallen by 35% from its highest level this year, has more room to fall as the odds of a spot LTC ETF fell on Polymarket, active users dropped, and the coin formed a head-and-shoulders pattern.
Litecoin Price Could Fall As Odds Of LTC ETF Approval Falls
One catalyst for the ongoing Litecoin price crash is the fact that many Polymarket don’t expect a spot ETF to be approved this week. One poll with $54,000 in assets has predicted that odds of the ETF being approved by July 31 have fallen to 24% by July 31st. Another poll with $8,000 has a 42% chance of the fund being approved.
Only one company, Canary Capital has applied for a spot LTC ETF, but the number could increase if the SEC becomes friendlier to the crypto industry. In a recent note, Eric Balchunas, the head of ETF strategy at Bloomberg has predicted that the SEC will approve a spot ETF since LTC is a Bitcoin Fork.
LTC ETF Approval Odds
LTC Transactions Are Falling
Meanwhile, on-chain data shows that Litecoin’s activity is falling as the price continues falling and sentiment in the crypto industry worsens. According to Bit Info Charts, the number of Litecoin transactions have fallen to the lowest level since 2023.
Litecoin Sent From Addresses 2
Another data shows that Litecoin’s hash rate has fallen after reaching a record high of 1.95 Phash/s earlier this month. It dropped to 1.71 Phash/s, a sign that the network is not seeing a lot of activity. The average transaction fee in the Litecoin’s network has also been in a downtrend this month.
LTC Price Has Formed A Small H&S Pattern
The other reason why the Litecoin price could fall sharply this week is that it has formed a small head and shoulders pattern. This pattern comprises a head, which is at around $117, two shoulders, and a neckline, which is at $96.78. The H&S pattern is one of the most bearish signs in the market.
Litecoin has dropped below the 50-day moving average and found support at the 100 EMA level. It has also moved below the key support at $112.67, the highest swing in March last year.
Therefore, a drop below the 100-day moving average will point to more downside of the LTC value, with the initial support being at $86.50, its lowest swing on December 20th, which is about 10% below the current level. A break below that level will bring the next support to $76.65. This is its highest point on July 26 and 20% below the present price.
Litecoin Price Chart
The bearish LTC price forecast will become invalid if the coin rises above the resistance level at $112.67.
The post 3 Reasons Litecoin Price Could Crash 20% This Week appeared first on CoinGape.
