Litecoin's price fell below the critical $100 mark on Thursday, declining 22% over the past week. The broader cryptocurrency market is reacting to updates on U.S. trade tariffs and growing anticipation around Friday’s White House Crypto Summit. With Litecoin traders increasing their leveraged short positions, the asset faces further downside risk.
Market Sentiment Shifts as Regulatory Discussions Intensify
Litecoin’s price trajectory has turned bearish after losing momentum from its early-February rally. At that time, optimism around a potential Litecoin ETF approval propelled LTC into the ranks of top-performing assets.
However, market dynamics shifted on March 2, when former President Donald Trump announced a U.S. strategic crypto reserve. The proposal prioritized five specific layer-one blockchain assets—none of which included Litecoin.
Since the strategic reserve announcement, Litecoin has underperformed for four consecutive trading sessions, dipping to a new 30-day low of $98. The break below the psychological $100 support level may embolden short-term sellers.
Litecoin Short Sellers Deploy $38 Million in Leverage
Litecoin’s exclusion from the U.S. crypto reserve proposal has led traders to take aggressive bearish positions. The upcoming White House Crypto Summit has accelerated this shift in sentiment, as investors increasingly focus on assets aligned with the current administration’s crypto policies.
A FOX News report confirmed that Ripple CEO Brad Garlinghouse will attend the summit, underscoring XRP’s perceived strategic importance. Other scheduled attendees include Coinbase CEO Brian Armstrong and Michael Saylor of MicroStrategy.
Discussions are expected to focus on regulatory clarity and the potential expansion of the U.S. crypto reserve. In this environment, Litecoin short sellers are seizing the opportunity to amplify downward pressure.
Data from Coinglass reveals a growing disparity between Litecoin short and long positions. Currently, there are $38 million in leveraged short futures positions compared to just $11 million in active long contracts. This significant gap highlights strong bearish dominance.
While hopes for a Litecoin ETF persist, the outcomes of the White House summit and the upcoming U.S. Non-Farm Payrolls (NFP) report are likely to drive market sentiment in the near term.
Technical Analysis Points to Further Downside Risk
Litecoin’s sharp decline below the $100 support level has intensified bearish momentum. Bollinger Bands indicate rising volatility, with LTC currently trading near $99.77, suggesting an oversold condition.
The four-day decline erased 22.40% of Litecoin’s value, accompanied by rising volume of 7.35 million, reinforcing ongoing selling pressure.
If buyers fail to reclaim the $100 level, sellers could push the price toward the next major support zone around $85, which aligns with a historical demand area.
The Relative Strength Index (RSI) sits at 37.62, indicating that Litecoin is nearing oversold territory. However, a sustained rebound remains uncertain. The RSI’s downward trajectory suggests weak buying interest, and its position below the mid-50 point favors further declines.
If the RSI breaks below 30, Litecoin could enter a deeply oversold state, potentially triggering a rebound. However, the RSI’s consistent failure to climb above its 47.60 moving average underscores persistent bearish sentiment.
A bullish reversal would require reclaiming the $105 level, where the 20-day moving average (at $120.57) converges with resistance. A short squeeze could then accelerate a move toward $120. Until then, continued selling pressure—particularly from leveraged traders—may push Litecoin toward $85.
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Frequently Asked Questions
Why did Litecoin’s price drop below $100?
Litecoin’s decline resulted from a combination of factors, including its exclusion from the proposed U.S. strategic crypto reserve and broader market reactions to upcoming regulatory discussions. Increased short selling also contributed to the downward momentum.
What is the significance of the White House Crypto Summit?
The summit brings together industry leaders and policymakers to discuss regulatory frameworks and national cryptocurrency strategies. Assets perceived as aligned with government policy, such as XRP, have gained attention, while others like Litecoin have faced selling pressure.
What are the key support levels for Litecoin?
The immediate support level is $85, based on historical demand zones. If selling continues, this level may be tested. On the upside, $105 serves as a critical resistance point that could signal a trend reversal.
How are traders positioning themselves in the Litecoin market?
Current data shows a significant buildup in short positions, with $38 million in leveraged shorts compared to $11 million in long contracts. This indicates strong bearish sentiment among traders.
Could Litecoin experience a short-term rebound?
A rebound is possible if Litecoin becomes oversold and buying interest returns. However, any recovery would likely require reclaiming the $105 resistance level and a reduction in open short positions.
What role does ETF approval play in Litecoin’s future price?
While ETF approval could bring positive momentum, short-term price action is being driven by macroeconomic events and regulatory developments. Traders should monitor policy announcements and market sentiment indicators.