Litecoin (LTC) Price Forms Bearish Pattern, Aligns With Broader Market Correction

Litecoin (LTC) has experienced a notable decline in recent weeks, closely mirroring Bitcoin's six-day downtrend since October 30.

Litecoin (LTC) has been experiencing a downturn in recent weeks, closely mirroring Bitcoin's six-day downtrend that began on October 30. However, LTC's downward trajectory started around Oct. 20. As of Nov. 4, 2024, LTC trades at roughly $65.33, indicating a 2.83% decrease over the past 24 hours.

This decline aligns with a broader market correction, with the global cryptocurrency market cap decreasing by 1.7% to reach $2.24 trillion.

On-chain metrics also underscore a bearish outlook for LTC. The Age Consumed metric, which tracks the movement of previously dormant tokens, has shown increased activity since late October. This suggests that long-term holders are potentially moving their assets to sell, increasing market supply and putting downward pressure on prices.

Recent on-chain data highlights a bearish outlook for LTC. As observed in the chart, the Age Consumed metric, which tracks the movement of older coins, reveals increasing activity from late October. This indicates that long-term holders might be shifting their assets to sell.

As these tokens enter circulation, they contribute to the overall market supply, exerting downward pressure on prices. Notably, this metric is used to gauge the holding periods of LTC before being sold.

Furthermore, the Network Realized Profit/Loss (NPL) metric has recorded significant negative values, indicating that many LTC holders are selling at a loss. Such behavior often contributes to panic selling or capitulation, leading to further price declines.

These on-chain indicators, combined with the recent price action, suggest that LTC may soon face continued bearish pressure. Moreover, traders would likely factor in the impact of the US elections on Bitcoin and other tokens, which would probably lead to a decrease in the number of buyers entering the market.

Meanwhile, LTC price has formed a bearish technical pattern, the ‘descending triangle,’ which could herald more bearish pressure for the LTC USD pair.

Analysts identify the descending triangle as a bearish continuation pattern, characterized by a descending upper trendline that compresses price action into lower highs, while a flat lower trendline provides weakening support.

This setup intensifies selling pressure as rallies struggle to breach resistance, leading to progressively weaker buyer attempts. The battle between bulls and bears typically ends with a breakdown below the lower trendline.

Traders estimate the potential downside by measuring the vertical distance from the highest point of the triangle to the flat support line, projecting this distance downward from the breakout point.

LTC's price has dipped below the pattern in the past, briefly indicating a bearish breakout. However, bulls managed to push the price back within the pattern, raising the possibility of a bull trap.

If Litecoin price confirms the pattern, the token could drop more than 59%, with a target approaching $27.