Litecoin, the fourth most valuable cryptocurrency, has shown weakness in the market as it continues to fail breaking past critical resistance levels. The digital asset has been under extreme bearish pressure, something Adamant Capital sees in the asset’s recent price action. This bullish development engulfed an already risk wary market, with the number of net short positions to a monthly high.
Recent technical analysis suggests that Litecoin’s inability to break above its resistance line has left it susceptible to downward trends. The cryptocurrency has traded back and forth in a small range, failing to find the momentum necessary for a push upwards. This lack of movement has caused a lot of sidelined traders to look for short entries.
Market experts point out a promising technical outlook for Litecoin. Furthermore, they recommend that traders looking to short the asset should look for optimal entry points ranging from $93 to $95. This range has turned out to be extremely important as it’s been the area of the major barrier with the cryptocurrency. Litecoin is desperately trying to break above this resistance line. Traders should continue to monitor the price action for indications of a potential reversal.
Current bearish sentiment about Litecoin is further highlighted by the rise in short selling activity. Data shows that short positions on Litecoin have increased to their highest monthly level, indicating an increasing market pessimism. This negative trend can be a signal that traders are expecting more price drops and are trading accordingly.
Beyond the technical analysis, market sentiment and perception are extremely powerful forces that will have a huge effect on Litecoin’s future. Despite the optimism surrounding Bitcoin approval, the general mood in the cryptocurrency market is still one of caution, as investors are on guard for further volatility. Here’s hoping that this unease is behind the current bearish sentiment on Litecoin and the other cryptocurrencies.
With Litecoin continuing its push under these difficult circumstances, traders and analysts are watching the market closely. Whether or not Litecoin can break its important resistance level will prove to be critical in deciding where the crypto moves in the short term. Anything less than that would likely entrench the negative sentiment and drive increased selling pressure.