Litecoin Analyst Warns of Price Correction; Halving Event Awaited

By temporary On Jul 4, 2023 42

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July 4, 2023 by Aishwarya shashikumar

Like other cryptocurrencies, Litecoin has gained recognition and acceptance as a form of payment by various merchants and businesses. Crypto analyst Ali suggests that based on Litecoin’s MVRV ratio, when it exceeds 30% as it has since 2018, a significant price correction typically occurs, resulting in a drop of around 30% to 40%.

Currently, #Litecoin MVRV 30D hovers around 35%.

Historically, each time $LTC MVRV 30D exceeds the 30% mark since 2018, a sharp price correction typically follows! This usually translates to a #LTC price drop ranging from 30% to 40%. pic.twitter.com/R5oMMaKWGc

— Ali (@ali_charts) July 2, 2023

Currently, the 30-day MVRV for Litecoin is approximately 35%. Historical patterns show that whenever LTC’s MVRV surpasses the 30% threshold since 2018, it usually triggers a substantial price correction of around 30% to 40%, according to a tweet by analyst Ali.

Over the weekend, Santiment, an on-chain analytics firm, cautioned about a potential local peak formation for LTC as social volume increased. Social volume spikes for LTC often correspond with temporary tops. On June 30, the price of LTC surged significantly, leading to a substantial green candlestick and reaching a high of $114.98 at the time of writing.

Over the past seven days, the token has risen by nearly 27%. Currently trading at $110, LTC has seen a slight increase in the last 24 hours. The daily Relative Strength Index (RSI) is presently above the overbought level of 70, suggesting that bullish momentum might pause briefly before continuing the upward trend.

Litecoin’s Golden Cross Signals Positive Trend Ahead

The formation of a golden cross on Litecoin’s daily chart indicates a positive signal. This pattern occurs when the 50-day moving average (MA) surpasses the 200-day moving average (MA), commonly interpreted as a bullish indicator.

Although moving averages reflect past performance, this signal suggests that Litecoin’s recent short-term gains have exceeded its long-term gains. Chart experts and traders typically view the golden cross as a positive sign for future price increases.

Furthermore, the upcoming halving event in August is expected to provide a bullish boost to Litecoin’s price. Previous Litecoin halvings have been followed by significant price surges, indicating the possibility of a similar scenario if historical patterns repeat themselves.

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