Litecoin (LTC) is recording signs of recovery as it approaches a key resistance zone; however, the current price pattern resembles the 'dead cat bounce' – a short term recovery in a downtrend. Technical Analysis indicates that this could be an opportunity for investors to consider a short strategy (Short) in the price range of $93–$95, expecting the decline to continue. On-chain data is also supporting the negative scenario, as profit-taking activity increases and long-dormant wallets are showing signs of 'waking up'.
The profit-taking activity of LTC investors reaches the highest level in two months
The Network Realized Profit/Loss – NPL( provided by Santiment shows that Litecoin investors are actively realizing profits.
The chart below recorded an impressive spike in the NPL index last Saturday – the highest level since March 24 – reflecting a strong wave of take profit from investors. Following that, on Monday of this week, the index continued to record a significant increase, further reinforcing the view that most traders are selling off at a considerable profit, thereby increasing selling pressure.
![])https://img.gateio.im/social/moments-091b5318fc362c7aaf042c274679e55c(NPL chart of LTC | Source: SantimentIn addition, when analyzing the "Age Consumed" index – a tool to evaluate the activity of tokens that have not moved for a long time – negative signals also appear. The sudden spike in this index indicates that "sleeping" tokens are starting to be activated and moved, which is often a warning sign of a price reversal in the short term. In the case of LTC, historical data shows that whenever this index rises sharply, the price usually falls shortly after, due to the amount of tokens being moved from cold wallets to exchanges, increasing selling pressure.
Notably, the strongest surge of the Age Consumed index last Monday was also the highest since mid-March, indicating that Litecoin may be entering a new downtrend adjustment cycle.
![])https://img.gateio.im/social/moments-d111206b06d870cfa1c38b49547b0c6b(Chart of Age Consumed Index of LTC | Source: Santiment) Litecoin Price Forecast: The 'dead cat bounce' scenario is developing.
The Litecoin price ###LTC( broke out of the uptrend formed in early April when it broke through and closed below this support line, and fell below the 200-day )EMA( exponential moving average at $93.70 in last Thursday's trading session. Increased selling pressure caused LTC to plunge 8.12% in the next day alone. However, demand has reappeared, helping the price recover slightly in the next three sessions. As of Tuesday morning, the coin is hovering around $89.30.
In the current context, this recovery is likely just a ‘dead cat bounce’ — a slight technical rebound within a larger downtrend. The area around $93.70, coinciding with the 200-day EMA, is serving as an important resistance. At the same time, the price zone of $95.80 — corresponding to the 50% Fibonacci retracement level — further reinforces the importance of the key resistance zone from $93.70 to $95.80.
! [])https://img.gateio.im/social/moments-cc284ab6c7f67f52b10a195e848af5ea(Daily LTC/USDT Chart | Source: TradingViewFor investors who are waiting for an opportunity to enter the market, this may be the ideal area to open a short position. Specifically, selling in the $93.70–$95.80 price range, combined with a stop loss just above the weekly resistance at $96.30, could be the right strategy in a scenario where the price continues to fall.
If LTC corrects from the price zone mentioned above, it is highly likely that the price will return to test the low from Saturday at $83.31. If it closes below this level, the downtrend may extend to the next support zone at $77.19.
The relative strength index )RSI( on the daily chart is at 44, below the neutral threshold of 50, reflecting a prevailing downward momentum. At the same time, the MACD indicator has also given a bearish crossover signal, further reinforcing the negative outlook.
Conversely, if the price of Litecoin closes above the weekly resistance level at $96.30, the bearish thesis will be invalidated. In that scenario, the recovery may continue to the peak on May 10 at $107.05.
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Litecoin price forecast: Risk of a deep fall if the 'dead cat bounce' scenario occurs
Litecoin (LTC) is recording signs of recovery as it approaches a key resistance zone; however, the current price pattern resembles the 'dead cat bounce' – a short term recovery in a downtrend. Technical Analysis indicates that this could be an opportunity for investors to consider a short strategy (Short) in the price range of $93–$95, expecting the decline to continue. On-chain data is also supporting the negative scenario, as profit-taking activity increases and long-dormant wallets are showing signs of 'waking up'.
The profit-taking activity of LTC investors reaches the highest level in two months
The Network Realized Profit/Loss – NPL( provided by Santiment shows that Litecoin investors are actively realizing profits.
The chart below recorded an impressive spike in the NPL index last Saturday – the highest level since March 24 – reflecting a strong wave of take profit from investors. Following that, on Monday of this week, the index continued to record a significant increase, further reinforcing the view that most traders are selling off at a considerable profit, thereby increasing selling pressure.
![])https://img.gateio.im/social/moments-091b5318fc362c7aaf042c274679e55c(NPL chart of LTC | Source: SantimentIn addition, when analyzing the "Age Consumed" index – a tool to evaluate the activity of tokens that have not moved for a long time – negative signals also appear. The sudden spike in this index indicates that "sleeping" tokens are starting to be activated and moved, which is often a warning sign of a price reversal in the short term. In the case of LTC, historical data shows that whenever this index rises sharply, the price usually falls shortly after, due to the amount of tokens being moved from cold wallets to exchanges, increasing selling pressure.
Notably, the strongest surge of the Age Consumed index last Monday was also the highest since mid-March, indicating that Litecoin may be entering a new downtrend adjustment cycle.
![])https://img.gateio.im/social/moments-d111206b06d870cfa1c38b49547b0c6b(Chart of Age Consumed Index of LTC | Source: Santiment) Litecoin Price Forecast: The 'dead cat bounce' scenario is developing.
The Litecoin price ###LTC( broke out of the uptrend formed in early April when it broke through and closed below this support line, and fell below the 200-day )EMA( exponential moving average at $93.70 in last Thursday's trading session. Increased selling pressure caused LTC to plunge 8.12% in the next day alone. However, demand has reappeared, helping the price recover slightly in the next three sessions. As of Tuesday morning, the coin is hovering around $89.30.
In the current context, this recovery is likely just a ‘dead cat bounce’ — a slight technical rebound within a larger downtrend. The area around $93.70, coinciding with the 200-day EMA, is serving as an important resistance. At the same time, the price zone of $95.80 — corresponding to the 50% Fibonacci retracement level — further reinforces the importance of the key resistance zone from $93.70 to $95.80.
! [])https://img.gateio.im/social/moments-cc284ab6c7f67f52b10a195e848af5ea(Daily LTC/USDT Chart | Source: TradingViewFor investors who are waiting for an opportunity to enter the market, this may be the ideal area to open a short position. Specifically, selling in the $93.70–$95.80 price range, combined with a stop loss just above the weekly resistance at $96.30, could be the right strategy in a scenario where the price continues to fall.
If LTC corrects from the price zone mentioned above, it is highly likely that the price will return to test the low from Saturday at $83.31. If it closes below this level, the downtrend may extend to the next support zone at $77.19.
The relative strength index )RSI( on the daily chart is at 44, below the neutral threshold of 50, reflecting a prevailing downward momentum. At the same time, the MACD indicator has also given a bearish crossover signal, further reinforcing the negative outlook.
Conversely, if the price of Litecoin closes above the weekly resistance level at $96.30, the bearish thesis will be invalidated. In that scenario, the recovery may continue to the peak on May 10 at $107.05.
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