Litecoin price has seen a significant drop to its lowest level since November 2022, as investors await the upcoming US consumer price index (CPI) data. The LTC coin has dropped by over 36% since its halving in August and by almost 50% from its highest level this year.
The focus now shifts to the US inflation data, as this could have an impact on Litecoin and other cryptocurrency prices. The numbers, scheduled for Wednesday, are set to show that the headline inflation jumped to 3.4% in August. A higher figure could lead to more LTC weakness.
Two main factors may have caused the sell-off in Litecoin. Firstly, there are serious regulatory concerns in the industry after the Securities and Exchange Commission (SEC) sued Coinbase and Binance. Secondly, the Federal Reserve has pushed interest rates to the highest level in decades. These hikes have led to a surge in yields in American assets, making them more attractive to investors than cryptocurrencies.
The daily chart shows that Litecoin price has been in a strong bearish trend in the past few months. It has now managed to move below the important support at $60.70, the lowest level on August 18th. Most importantly, it formed a death cross on August 17th when the 50-day and 200-day moving averages make a crossover.
Litecoin price has also retreated below the key support levels at $71.12 and $64.87, the lowest levels in June and March. Therefore, the outlook for the coin is bearish, with the next level to watch being at $50.
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