Litecoin Price Forecast: LTC Flags Downside Risks If the $68 Support Breaks

Highlights:

• The Litecoin price is trading at $68, marking a 2% drop today.
• The derivatives data show a slip in open interest as the volume spikes by over 140%.
• The technical outlook shows an intense bearish grip, as LTC flags downside risk if the $68 support breaks.

The Litecoin (LTC) price comes out slightly to trade at $68 at the time of writing on Monday after getting support on the lower end of the falling wedge pattern. The derivatives indicators are showing that LTC can recover should the buyers remain in the area of major support.

The data in the OI-Weighted Funding rate of CoinGlass reveals that the number of traders who bet on the price of Litecoin falling even more is less than those who bet on the price.

The metric has shifted to a positive reading on Sunday and now stands at 0.0023%, which shows that longs are paying shorts. As a rule, Litecoin has recovered when the rates of funding turn from negative to positive.

On the other hand, Litecoin’s long-to-short ratio is 0.9001, according to Coinglass data. This ratio is below 1, indicating bearish sentiment, as more traders are betting on the asset’s price to decline. The open interest is down by 2.81% to $537 million, while trading volume has soared 143% to $894 million. The recent surge in volume shows heightened market activity in the LTC market.

However, the drop in open interest suggests that money is flowing out of the Litecoin market, which may cause a slip in LTC price. 

LTC Flags Downside Risk if the $68 Zone Breaks

Litecoin’s price faced rejection from the 50-day Simple Moving Average (SMA) at $76 on January 15 and declined nearly 10% to current levels at $68. The altcoin has closed below both moving averages, tilting the odds towards the bears at the moment. LTC has continued its correction, falling by more than 2% last week. At the time of writing on Monday, the Litecoin price is holding above the lower trendline of the falling channel, as bulls try to defend it as the key support level.

The Relative Strength Index (RSI) on the daily chart reads 36, below its neutral level of 50. This indicates a bearish momentum gaining traction. In addition, the Moving Average Convergence Divergence (MACD) showed a bearish crossover on January 11, which remains intact with rising red histogram bars below the neutral level. This further supports the negative outlook in the LTC market, as the selling pressure is mounting.

Looking ahead, if LTC breaks below the current price levels, reinforced by the negative technical indicators, it could extend the decline toward the April 2025 lows of $63. A close below this level could extend losses toward the October 10 low of $51.

On the other hand, if the altcoin recovers and bulls strongly defend the $68 support zone, a rebound towards resistance levels could be imminent. In such a case, it could extend the recovery toward the immediate resistance level at $76, which aligns with the 50-day SMA. If the bulls flip this level into support, a further upside towards $84-$98 could fuel the rally, painting the market as bullish.