Litecoin price has been under intense pressure for the past few days amid increased market volatility in the crypto sector. Litecoin, the silver to Bitcoin’s gold, has dropped by more than 7%in the past week but remains 25.86% higher in the year to date. The asset currently ranks 12th in the crypto market by market cap.
Litecoin price has been on a bearish trajectory for the past few days as investors eye the coin’s fast-approaching halving event. The crypto market experienced its worst week so far this year in the wake of a continued regulatory crackdown on cryptocurrencies.
The US Securities and Exchange Commission (SEC) filed a lawsuit against crypto exchange, Binance earlier on Monday and Coinbase on Tuesday. In the lawsuit, the Wall Street regulator accused Binance, the world’s largest crypto exchange platform, of misusing customers’ funds and running illegal operations in the United States. The announcement saw crypto heavyweights, Bitcoin and Ethereum, crash by more than 5% on Monday.
Other cryptocurrencies, including Binance Coin, Cardano, Polygon, and Solana, among others, dipped to record lows on the back of the legal battle between the SEC and Binance. Binance has faced a slew of lawsuits and complaints in recent months. Earlier in March, the US Commodity Futures Trading Commission filed a lawsuit against Binance, alleging that Binance offered unregistered crypto futures and assets to US residents.
The focus has now shifted to the US Consumer Price Index (CPI) data for May and the Federal Reserve monetary policy meeting slated for next week. Uncertainty around the Fed’s interest rate outlook has spread in markets in recent weeks as both Fed officials and economic data relay mixed signals. Markets are pricing a 28% chance that the Fed will extend its rate-hike campaign in June.
Litecoin Price Outlook
The daily chart shows that the Litecoin price has been in freefall for the past few days. The digital currency is moving slightly below and above the 50-day and 200-day exponential moving averages, respectively. It has also remained above the 50-day and 100-day simple moving averages, while its Relative Strength Index (RSI) remains below the signal line and the neutral zone.
Therefore, the Litecoin price is likely to continue falling in the immediate term before an upward price correction. A move below the critical support at the 200-day EMA at $85.30 will push the price lower to find support at $82. However, a flip above the important resistance level at $93.30 will invalidate the cautiously bearish thesis.