- Litecoin price has plunged by over 21% from the highest level this month.
- Liquidations and open interest in the futures market has dropped.
- Focus now shifts to the upcoming Litecoin halving event.
Litecoin price has remained in a consolidation phase in the past few days as the countdown to halving continues. The coin was holding steady at $90.71 on Thursday, where it has been in the past few days. This price was more than 21% below the highest level this month, meaning it has re-entered a bear market.
Liquidations and open interest falls
Litecoin price has underperformed in the past few days as demand for cryptocurrencies has weakened. Data shows that the overall volume of cryptocurrencies traded in exchanges has dropped in the past few weeks.
This performance has coincided with the retreat of Bitcoin price from the year-to-date high of over $31,000 to slightly above $29,000. In most periods, LTC and other altcoins tend to follow the performance of Bitcoin.
Litecoin price has also retreated after the sharp decline of liquidations. Data compiled by Coinglass shows that total liquidations on Thursday stood at about $200k. Shorts stood at $126k while longs were $73.6k.
Liquidations happen when brokers and exchanges are forced to close trades when they move to a certain loss level. In most periods, a cryptocurrency price tends to rise when short liquidations rise.
Another data shows that Litecoin open interest in the futures market has held steady in the past few days. The open interest stands at $515 million, which is lower than this month’s high of $520 million. Most of the open interest was in Binance, Bitmex, and Bybit.
The next important catalyst for Litecoin price will be the upcoming halving event. Halving is a process where the block rewards in a network are reduced by half. In most periods, cryptocurrencies like Bitcoin tend to do well ahead of a halving event.
Litecoin price prediction
The 4H chart shows that the LTC crypto price has lost momentum in the past few weeks. It has recently formed a descending channel shown in black. This channel connects the highest points since July 6th.
Litecoin is consolidating at the 25-period and 50-period moving averages. The Relative Strength Index (RSI) has moved to the neutral point of 50. At the same time, the price is hovering slightly below the 50% Fibonacci Retracement level.
Litecoin’s volume has been in a downward trend. Therefore, the outlook for Litecoin is neutral with a bullish bias. A bullish breakout will likely rise as buyers target the key resistance level at $100. This trend will likely happen ahead of the halving event.
