Litecoin (LTC) is trading just below $90 having faced a strong rejection at a critical resistance. The price is now due for a major pullback and could retrace to its trend line support that it formed after breaching the downtrend resistance around the beginning of the year. This is the best bullish case there is for LTC/USD and under that case a sharp pullback is due before we see a continuation of this rally. This is considering we have already bottomed and the bulls are right that this is the end of the bear market. Even if we agree with that, there is no denying that the price is long overdue for a major decline at least to test the trend line support if not fall lower. The RSI and Stochastic RSI on the weekly chart appear to be in the same position as they were between May and September last year.
This means that even under the bullish scenario, LTC/USD is due for a sharp decline which could wipe out more than 30% of its market cap in the weeks ahead. Considering that the weekly Stochastic RSI has never been this overbought since the beginning of the bear trend, it is reasonable to expect that the price might end up falling a lot more. The weekly trading volume started to pick up since the beginning of the year but is now starting to decline. The Fear and Green Index shows that investors are now as confident as they were around February, 2018 when the bear market was just getting started. This means that the market has yet to inflict maximum pain to make most investors give up on Litecoin (LTC). That is when the majority dumps their coins as the market continues to fall and when it is all over, smart investors start buying when there is blood on the streets.
Litecoin (LTC) has a major correction long overdue against Bitcoin (BTC) as well. The weekly chart for LTC/BTC shows that the price could decline to the bottom of the rising wedge in the weeks ahead as Litecoin (LTC) is now massively overbought against Bitcoin (BTC). It is important to note that LTC/USD has its halvening event in August which means the mining rewards will be cut in half and mining one Litecoin (LTC) will be twice as expensive which will make it worth at least double its price.
This is one of the biggest reasons we have seen a sudden rise in bullish interest in Litecoin (LTC). However, that seems to be price in now as a lot of investors have FOMO’ed in anticipating a rise leading to Litecoin’s upcoming halvening. This is why we expect the price to retrace heavily during the upcoming decline that might see most cryptocurrencies decline to new lows in 2019. Considering that major financial markets are marred by confusion and uncertainty at the moment, we expect the cryptocurrency market to decline even more aggressively when the S&P 500 starts to decline. Litecoin (LTC) and other mid to small cap coins are going to be hit the hardest when that happens.