- Litecoin price crashed below the important support level at $50.
- The crash happened ahead of the upcoming American inflation data.
Litecoin price dived to the lowest level since September 21st. It crashed to a low of $49.36, which was almost 10% below the highest level this month. This decline has brought its market cap to more than $3.6 billion, which is much lower than its all-time high of over $21 billion.
US inflation data ahead
Litecoin price made a strong bearish breakout as Bitcoin crashed below the important support level at $19,000. The total market cap of all crashed to more than $904 billion, which was the lowest level in more than a month.
The main catalyst for the LTC price crash was the latest minutes by the Federal Open Market Committee (FOMC). According to the statement, the committee pointed to more rate hikes in the coming months. As a result, analysts expect that the bank will hike by 0.75% in November followed by another 0.50% increase in December.
If this happens, it will mean that the bank has hiked rates by 425 basis points this year. It also means that the official cash rate in the US will end the year between 4.25% and 4.50%. As a result, America’s bond yields will rise to almost 5%.
Learn more about how to buy Litecoin.
This explains why Litecoin and other cryptocurrency prices have crashed this year. For one, holding US dollars is having a better yield than other assets.
The next key catalyst for the Litecoin price will be the upcoming American consumer price index (CPI) that will come on Wednesday. Economists polled by Reuters expect the data to show that American inflation rose by 8.1% in September from 8.3% in the previous month.
Core inflation, which excludes the volatile food and energy products, is expected to have increased to 6.5%. A bigger inflation figure will give the Fed an impetus to continue hiking interest rates.
Litecoin price prediction
The four-hour chart shows that the LTC price continued crashing on Thursday. As it plunged, the coin managed to move below the key support at $50, which was a psychological level. It had struggled moving below the support level several times in September.
LTC has also crashed below all moving averages while the Relative Strength Index (RSI) tumbled to the oversold level. Therefore, by falling below this support, it means that sellers have prevailed and that the coin could soon crash below $40.
