Another leg down for Bitcoin (BTC) could however trigger further losses for LTC given the strong correlation between their price movements
Litecoin (LTC) was among major altcoins to suffer heavy losses following Bitcoin’s flash crash that triggered widespread selling across the crypto market.
The 14th ranked cryptocurrency sank 18% on Tuesday to break below key support levels. Even with today’s rebound, LTC’s price is still 11% down on its 24-hour opening value.
But bulls are likely to push higher, with targets near the psychological $200 and $230 levels.
According to technical analyst Ali Martinez, LTC is still bullish despite the 18% nosedive seen on Tuesday. Per the analyst, the Litecoin network has registered an increase in new addresses, which suggests an inflow of “new money” as investors retain confidence in the price of Litecoin going up.
#Litecoin bull run isn’t over yet! 🚀
The number of new addresses joining the $LTC network continues making higher highs. Nearly 220K new addresses were created yesterday.
– Ali Martinez (@ali_charts) September 7, 2021
However, the bullish outlook might not hold if Bitcoin (BTC) continues to struggle with bearish pressure around $46,000. If the benchmark cryptocurrency sees further downside, a cascade effect across the market could include Litecoin price diving to fresh lows.
Litecoin price outlook
LTC/USD remains above a crucial buffer zone on the daily chart, which suggests bulls might fancy new gains if market sentiment improves.
LTC/USD daily chart. Source: TradingView
The horizontal support line around $165 that currently anchors LTC acted similarly in February and March this year, providing the springboard that set Litecoin prices towards new all-time highs of $410 reached in May.
If bulls conquer resistance at $185, they could target $200 and then the 5 September highs of $233.
The flip side could see LTC/USD range-bound in the $165 to $185 zone, with the 200 EMA on the daily chart providing a pivot point near $170.
The RSI and MACD indicators suggest bears are in control, and the daily candlestick currently portrays a struggle between bulls and bears. If sellers puncture the support zone and there’s another leg down below $160, Litecoin price could accelerate its decline towards the previous support level around $142.