Litecoin price fell to its lowest level since June 26 as volatility and the US dollar jumped. The LTC coin declined to a low of $52.36 and then bounced back around $56.15. The price is down about 15% from this month’s high, giving it a market cap of over $3.9 billion.
LTC recovery fades
Litecoin, like other cryptocurrencies, made a strong recovery this year after dropping to a low of $40.40. It managed to rally to this month’s high of $65.86.
Recently, however, this bullish trend has faded as concerns about the Federal Reserve resumed. Analysts believe that LTC and other cryptocurrencies have risen since inflation cooled as investors turned to the more lenient Federal Reserve.
However, minutes published by the Federal Reserve on Wednesday showed that the bank will continue to hike interest rates. These minutes revealed that the committee is of the view that strictness is needed to prevent inflation from entering the economy.
Therefore, there are signs that investors are far ahead of the Fed. In fact, most of the central bank governors who spoke after the recent inflation data said the toughening process would continue.
Litecoin price also declined as the US Dollar made a strong comeback. The dollar index, which measures the greenback’s strength against a basket of currencies, rose from this month’s low of $104 to a high of $109.10. LTC and other cryptocurrencies have an inverse relationship with the dollar index.
Furthermore, it backfired as concerns grew about the health of the global economy. On Monday, the PBOC decided to cut interest rates for the second time this year as economic weakness continued. This explains why most global stocks and commodities have also retreated.
Litecoin Price Prediction
The four-hour chart is showing that LTC price is forming an ascending wedge pattern shown in green. In price action analysis, this pattern is usually a bearish signal. As a result, it managed to break below this pattern this week.
As it declined, it managed to move below the 25-day and 50-day moving averages, while the MACD moved below the neutral point. Therefore, Litecoin price may resume a bearish trend as sellers attempt to break below the $50 support level.