Litecoin price is down today in part due to its overbought conditions and ahead of the Federal Reserve's meeting minutes release.
Litecoin (LTC) price is down today, mirroring downside moves elsewhere in the crypto market.
On July 5, the LTC price dropped over 3% to $100.50. On the same day, the crypto market's overall capitalization fell 2%, suggesting traders have started securing profits at the local tops of multiple cryptocurrencies.
Litecoin's RSI turns "overbought'
Litecoin rallied by more than 65% to reach a year-to-date (YTD) high of $116 on July 2.
The gains appeared primarily due to euphoria around its halving in August and its listing on EDX Markets, a newly-launched exchange backed by Wall Street giants like Citadel Securities, Fidelity Investments, and Charles Schwab.
Since then, however, LTC price has corrected by nearly 14%, including the 3% drop on July 5. One reason is its overbought relative strength index (RSI) on the daily chart, which typically prompts the price to drop or consolidate sideways.
Fed minutes pressure riskier assets lower
In addition to crypto, Litecoin's losses on July 5 mirrored similar downside moves in traditional markets. It happened as traders awaited minutes from the Federal Reserve's June policy meeting to understand their position on interest rates. The minutes will release on July 5 at 1400 EDT.
The market believes Fed officials have discussed raising the benchmark rates two more times in 2023 despite not raising them in the last meeting. Higher interest rates have proven to be bearish for cryptocurrencies like Litecoin.
Markets are hopeful that today's release of the Fed minutes can provide clarity on a Federal Reserve that refrained from raising interest rates at the last meeting but intends to raise them two more times. @steveliesman joins with more: pic.twitter.com/hDfRgKTRcK
— Squawk Box (@SquawkCNBC) July 5, 2023
Litecoin price 2023 outlook
Litecoin now holds above $100, a level that has turned from resistance into support. As shown in the weekly chart below, this level has also served as the upper trendline of LTC's prevailing ascending triangle pattern.
As a result of its close above the descending triangle's upper trendline, LTC has entered a technical breakout stage. As a rule, a descending triangle reversal breakout can see the price as much as the pattern's maximum height.
Related: Here’s what happened in crypto today
Thus, Litecoin's descending triangle reversal breakout target comes to be around $240 in 2023, up 140% from current price levels.
On the other hand, Litecoin price will drop if its ascending channel pattern plays out instead in the bearish scenario. This will involve LTC price testing the lower trendline at around $85 in Q3, down about 15% from current price levels.
Moreover, a breakdown of the bear flag can have LTC price see even lower levels. In this case, LTC/USD risks dropping toward $40 in 2023, down 60% from current price levels, as shown below.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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