Litecoin is one of many crypto tokens that have recently struggled to achieve upward momentum.
LTC has made an incredibly close correlation to Bitcoin lately, which has caused it to trade sideways for a long time. Like BTC, it is currently trading at the lower limit of this range and is starting to see some obvious signs of weakness.
Analysts think the next big move for bulls could turn out to be bad as it may drop to a level that hasn't been reached since early 2017.
There is a fractal pattern that signals that this next drop could be followed by a significant upward movement.
However, the impending decline could be a symptom of the weakness that the cryptocurrency saw versus the rest of the markets in 2020. A dealer points out that he has rated many of his competitors significantly below average.
Litecoin is closely correlated to Bitcoin, but will be significantly worse than the crypto market in 2020
At the time of writing, Litecoin is trading at just over 1% at its current price of $ 41. This is roughly the price level it has been floating around in the past few days.
LTC's month-long trading range has been set between $ 40 and $ 50, with crypto only breaking above and below these limits on brief occasions.
This trading range, along with Bitcoin, was between $ 9,000 and $ 10,000.
Since Bitcoin and Litecoin have been incredibly correlated lately, it seems to depend on whether or not LTC breaks are below $ 40 or whether the benchmark crypto can hold above $ 9,000.
From a macroeconomic point of view, 2020 was not too big for Litecoin as it is traded nominally from the beginning of the year.
An analyst spoke about it in a new tweetThis explains that LTC, Bitcoin Cash and XRP have all been pretty sluggish lately and have not had a “V-shaped” recovery since the meltdown in mid-March.
"Now when we look at the performance of the majors, we only really had ADA with a stronger return. Huge premium and the only one to pass the February high. Weak recovery for BCH, LTC and XRP. Reduced% -Return, rounding off and distance from the highs in February. "
Image Courtesy of Cold Blooded Shiller. Chart via TradingView.
LTC is expected to drop to early 2017 lows against Bitcoin
An analyst recently explained He expects this underperformance to continue in the coming weeks, which may lead crypto to the BTC price level no longer seen since early 2017.
"LTCBTC: Can't rule out another leg. It would be a decent area to accumulate in," he said.
The same analyst also notes that this could form a fractal pattern similar to a few years ago, signaling that this next decline could be just what is needed to trigger a parabolic uptrend.
Image Courtesy of TraderXO. Chart via TradingView.
Featured image from Shutterstock. Charts from TradingView.