Litecoin Price Smoked Even as Hashrate Jumps

Litecoin price has been in a strong bearish trend in the past few days as demand for cryptocurrencies plunged. LTC plunged to a low of $61.30, which was the lowest level since November 22. It has plunged by more than 24% from the highest level this month.

Fear and greed index 

Crypto investors are getting significantly fearful in the past few weeks. There are two main concerns in the market. First, there are concerns that the Federal Reserve will push the American economy to a recession because of its hawkish tone. In its meeting last week, the Fed decided to hike interest rates by 0.50% and hinted that the terminal rate will rise to 5.1%.

Extremely high-interest rates could lead to a recession or stagflation. Stagflation happens when a high-interest rate environment coincides with a period of slow growth. America’s inflation stands at 7.3%, which is above the Fed’s target of 2.0%. As such, investors believe that cryptocurrencies like Litecoin will struggle in a period of a recession.

However, there are some signs that the American economy will have a soft landing. Gasoline prices have dropped while shipping costs have continued retreating in the past few months. Also, there are clear signs that inflation has already peaked.

Second, Litecoin price has dropped because of the ongoing fear about the crypto market as outflows continue. Binance, the biggest exchange in the world, has lost more than $10 billion in assets in the past 30 days. This trend happened as investors remain concerned about the safety of exchanges.

On a positive side, the safety of Litecoin’s network has continued to improve. The network’s hashrate has risen to 625 TH/s, which is close to its all-time high.

Litecoin price prediction

The daily chart shows that the LTC price has pulled back as it lost its momentum. It has moved below the 50-day and 25-day moving averages while the Relative Strength Index (RSI) has moved close to the oversold level. 

Therefore, with no Santa Rally in sight, the path of the least resistance for Litecoin is lower. If this happens, the next key level to watch will be at $47.85, which was the lowest level on November 9. A move above the resistance at $73.50 will invalidate the bearish view.