- Litecoin price continued its bullish trend on Monday.
- The US dollar index plunged to the lowest point in more than a week.
- Focus shifts to the upcoming Jerome Powell statement and US inflation data.
Litecoin price held steady above $80 as the US dollar index (DXY) plunged to the lowest level since January 3. LTC surged to a high of $83.15, the highest level since December 5. It has surged by more than 34% from the lowest level in 2022.
US dollar index retreats
The DXY index has crashed hard in the past few months as investors watch trends in inflation and employment. It dropped sharply after the Labor Department published the latest American jobs data on Friday.
The numbers revealed that the American economy continued adding thousands of jobs in December even as recession risks rose. It created over 225k jobs during the month, bringing the total job additions in 2022 to more than 4 million. The closely-watched unemployment rate dropped to 3.5%, close to its lowest level in five decades.
The main catalyst for the performance of the US dollar index is that wage growth or inflation dropped below 5% in December. As such, analysts believe that a drop in wage growth could push the Federal Reserve to start going slow on its rate hikes.
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Litecoin and other cryptocurrencies tend to do well in periods of low-interest rates. This explains why they underperformed in 2022 as the Federal Reserve hiked rates by 450 basis points and started its quantitative tightening policy.
The next key catalyst for the Litecoin price this week will be a statement by Jerome Powell, the Federal Reserve chairman. In it, he will likely reiterate his hawkish tone and insist that the bank will continue hiking interest rates in the next few meetings.
Litecoin will also react to the latest US inflation data scheduled for Thursday. These numbers are expected to show that inflation continued retreating in December. Gasoline and natural gas prices have been in a downward trend recently. It will also react to the latest Wall Street earnings.
Litecoin price prediction
The four chart shows that the LTC price has been in a bullish trend since it bottomed at $61.3 in December. It has moved above the 25-day and 50-day moving averages and the important resistance level at $77.98, the highest point on January 4. Oscillators have been supportive of the rally. LTC price has moved to the first resistance of the Woodie pivot tool.
Therefore, the LTC/USD price will continue rising as buyers target the second resistance level at $90. A drop below the support at $77.98 will invalidate the bullish view.
