Bitcoin and cryptocurrency prices have dropped sharply over the last week. ETH, LTC, XRP and other main cryptocurrencies are losing double-digit percentages this past week, reaching the lowest price level in September 2021.
The total crypto market capitalization also continues to fall along with the crypto prices and hit almost $ 1 trillion. Litecoin ranks 14th in terms of market cap with the volume of 0.47%.
One of the main reasons of the plunge in crypto market was the meeting of the US Federal Reserve System (FED). As it became known at the meeting, the Fed is going to deploy a stricter policy as a result of which investors are less and less interested in investing in risky assets.
The second possible reason was the riots in Kazakhstan, which have been going on for more than one day. And as you know, after China outlawed cryptocurrencies in the first half of 2021, many large Chinese crypto-mining companies moved to Kazakhstan - this was facilitated by both the geographical proximity and the low cost of electricity in the country. Very quickly, Kazakhstan became the second largest Bitcoin mining company in the world, providing about 18% of the world's hashrate.
But the riots that broke out at the very beginning of January are now accompanied by a power outage and the Internet, which, of course, slows down the mining of Bitcoin and reduces the income of miners. Against the background of such an unstable situation, miners may begin to leave the country, and in general, the situation will negatively affect the global Bitcoin hashrate as well as Bitcoin price.
As for the technical forecast for the LTC/USDT, apparently the market has not yet found the bottom and we will see a further decline this week.
First, let's move on to the daily price chart. We can see that the support was "broken", above which the price held for quite a long time. The closing price of the daily candle also lies outside the support level, which also confirms the beginning of a new wave of decline. And if so, judging by the chart, the next support level for which the LTC / USDT pair can reach will be the zone near the $107-$110.
The MACD indicator, the lines forms a death cross which also on the side of the bears. The signal line of the RSI indicator approached the support line, but is still outside the oversold zone, which means the price may decline even deeper.
Now let's move on to the 4-hour price chart, where we will use a line chart instead of candles.
Here we see that quite recently the MACD indicator lines forms a golden cross, and a bullish divergence was observed between the price chart and the RSI signal line. This was perhaps the last chance that the price could again be above the support line. However, it seems that the price ignored this divergence and now, after just a couple of candles, we can see a hidden bearish divergence between the price chart and the same RSI indicator.
One thing is also clear, the selloff has not over yet and it is hardly worth talking about a reversal in the coming days. So far, the bear is still in control of the market, we may see further decline with even larger scale than that of last week.