Bitcoin and Crypto Markets Continue Their Slide…But Why?!Litecoin is trading more than 40% lower than pre-halving local highs. But according to an ominous-sounding technical analysis signal, LTC could have a lot more decline ahead.
Litecoin Triggers Death Cross After Halving Rally Failure
This month, the Litecoin block reward halving came and went, leading to very little upside. The disappointment is partly responsible for the depth of the recent post-halving crash. The rest is part of a broader market correction driven by Bitcoin.
The cryptocurrency has lost around 45% of its value since late June. The fallout from all the selling has taken price below two important moving averages — which have since formed a death cross on daily LTCUSD price charts.
A death cross occurs when the 50-day moving average (50MA) crosses over the 200 day moving average (200MA) from above. But what exactly is a death cross and what does it mean for Litecoin?
Does This Signal A Return To A Downtrend In LTC?
The death cross is a bearish technical analysis signal that tells investors that the trend is potentially turning down. In contrast, a golden cross would be a bullish signal suggesting the market is poised to head upward.
The last death cross in Litecoin resulted in a 30% rise and a golden cross triggered in the days that followed. But now the deadly version of the signal is back again on daily LTCUSD charts. And it could be back for blood.
What we don’t know yet is if the crossover is more market whipsaw — a common challenge and limitation of using moving average-based trading systems — or if it is indeed a forewarning of a dangerous trend change. Another golden cross after this latest death cross would once again nullify the bearish outlook.
Importantly, LTCUSD is already crossed bearish on weekly charts, it just that now the daily is joining back in on the action.
#Litecoin has death crossed again on the daily
Even worse, both the 50-day and 200-day averages are turning down
Not looking so hot pic.twitter.com/kwUV03tc7P
— Tony “The Bull” (@tonythebullBTC) August 24, 2023