- Litecoin (LTC) faces strong resistance near $93–$95, forming a potential dead-cat bounce as bearish sentiment reaches a monthly high.
- A drop below $83.31 could trigger further losses, while a break above $96.30 would invalidate the bearish outlook.
Litecoin Dead-Cat Bounce in Action: Is a Deeper Price Drop Coming?
Litecoin (LTC) is flashing clear warning signals for traders as it struggles to push past a critical resistance zone. Currently trading near $91.25, LTC’s recent attempt to reclaim higher levels was swiftly rejected at the 200-day Exponential Moving Average (EMA) around $93.30—indicating a classic dead-cat bounce formation.
This pattern suggests that the recent upward move is merely a temporary blip in an ongoing downtrend. Traders on the sidelines are eyeing short positions between $93.30 and $95.18, with a tight stop-loss above the resistance at $96.30.
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Bearish Sentiment Dominates: Short Positions Hit Monthly High
Data from Coinglass reveals a rising tide of bearish sentiment in the market. Litecoin’s long-to-short ratio has dipped to 0.82—its lowest in over a month—signaling that more traders are betting on a price decline. This imbalance reflects growing skepticism about litecoin ability to stage a sustained recovery.
The surge in short positions further strengthens the case for a continued downtrend, particularly if key support levels begin to break down.
Technical Breakdown: Critical Levels to Watch
LTC recently broke below an ascending trendline and the 200-day EMA, leading to an 8.2% drop between May 30 and June 5. Despite a short-term bounce, Wednesday’s rejection confirms the dead-cat bounce theory, with resistance at the 200-day EMA ($93.30) and the 50% Fibonacci retracement level ($95.18) forming a tight bearish zone.
If the bears take control, Litecoin could retest the June 8 low at $83.31, and potentially slide further toward the next support at $77.19. The Relative Strength Index (RSI) hovering near 50 adds to the uncertainty—only a decisive move below this neutral zone will reinforce the bearish outlook.
Bullish Hope: What Could Invalidate the Downtrend?
Despite the strong bearish setup, a daily close above $96.30 would invalidate this negative outlook. Such a move could breathe life into the bulls and trigger a rally toward the May 10 swing high at $107.05.
For now, however, litecoin price remains at a technical crossroads—and the bears seem to be tightening their grip.