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Charlie Lee, the creator of Litecoin, recently stated that upcoming updates related to fungibility and privacy could be a “game changer” for the digital asset, as covered in a recent article. This would be a breath of fresh air for the cryptocurrency, especially since its price has been struggling to keep up with market selling pressure.
However, the price would need to see an influx of buyers in order to shift its bearish narrative. LTC was trading at $134.4 at the time of writing, down 1.4 percent in the previous 24 hours.
Litecoin Daily Chart
Following the 19 May sell-off, a reactive purchasing session pushed Litecoin back towards $200. Since then, though, sellers have dominated market action. On the daily chart of LTC, a down-channel developed as its value fell nearly 50% from $200 to its 22 June low of $105.
A small rebound has occurred in the last few days, but gains have been limited at the 20-SMA (red), with the price unable to break away from the pattern. To soften a decline, support zones may be found between $104 and 118, with the Visible Range indicating significant demand in LTC inside these ranges.
A closure below these levels, on the other hand, may push the price all the way down to December 2020 levels of $90, indicating another 30% loss from the press time level.
On June 22, the Relative Strength Index broke south from its up channel and entered the oversold zone. Its current rising leg will be critical in deciding its direction in the coming weeks. If it fails to move over 50-55 in the following weeks, its negative trend will most certainly continue.
The Directional Movement Index did not yet indicate a changing trend. The -DI remained slightly above the +DI, while an ADX value of 36 indicated that the market remained directional. The MACD created a bullish divergence with LTC’s price, which was a rare positive.
For this to take effect and result in a speedier recovery, losses must remain between the support levels of $108-$114. Meanwhile, market bulls should be wary of a return to late-December levels given the market’s lack of purchasing impetus.
Recent losses may have dragged Litecoin back towards the $108-114 support zone, from where some stability may be expected. However, given its downward trend, the risk of a breakdown cannot be dismissed. In such a case, LTC might reach the $90 level.