LTC's Death Cross: Is it Really the End?

In short: Litecoin's performance has been lackluster, despite being weeks away from its halving, and the altcoin market as a whole has been affected by SEC-related sell pressure. Litecoin is at risk of forming a death cross on the daily timeframe, which often signals a downtrend but not always. The death cross could lead to selling from investors expecting more from the halving, but a previous death cross turned into a golden cross and led to a rally. Litecoin must recover its bullish momentum to avoid negative implications.

Our quick analysis:
Litecoin, the eleventh-ranked cryptocurrency by market cap, has recently sunk along with the rest of the crypto market. The downward pressure has put the altcoin at risk of forming a death cross on the daily timeframe, which sounds ominous and often indicates a downtrend is coming. However, it might not be lights out for LTC after all.

One of the reasons for the lackluster Litecoin performance ahead of halving is attributed to the US SEC. The regulatory body is trying to kill the crypto industry, causing LTCUSD daily charts to inch closer to an ominous death cross. Despite this, fundamental and technical signals both point to LTC being undervalued.

A death cross occurs when the 50-day moving average crosses below the 200-day moving average from above. This is considered a sell signal in a moving average-based trading system, and often precedes a negative trend change. However, a closer look at the 2020 death cross shows it immediately rolled into a golden cross as soon as Litecoin found some support and started rising again.

Death crosses and golden crosses can sometimes trigger back and forth in a choppy market, which is a drawback of using moving averages as trading signals. In addition, as an average of price action, moving averages are lagging indicators in general. Thus, a golden cross must be left on the chart when all the consolidation ends; otherwise, the looming death cross signal could have truly deadly implications.

With Litecoin's halving scheduled for under 45 days from now, anything is possible. So, is it really the end for LTC's price or is this just another bump in the road? Only time will tell.

---

Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.

Litecoin, the eleventh-ranked cryptocurrency by market cap, has recently sunk along with the rest of the crypto market. The downward pressure has put the altcoin at risk of forming a death cross on the daily timeframe, which sounds ominous and often indicates a downtrend is coming. However, it might not be lights out for LTC after all.

One of the reasons for the lackluster Litecoin performance ahead of halving is attributed to the US SEC. The regulatory body is trying to kill the crypto industry, causing LTCUSD daily charts to inch closer to an ominous death cross. Despite this, fundamental and technical signals both point to LTC being undervalued.

A death cross occurs when the 50-day moving average crosses below the 200-day moving average from above. This is considered a sell signal in a moving average-based trading system, and often precedes a negative trend change. However, a closer look at the 2020 death cross shows it immediately rolled into a golden cross as soon as Litecoin found some support and started rising again.

Death crosses and golden crosses can sometimes trigger back and forth in a choppy market, which is a drawback of using moving averages as trading signals. In addition, as an average of price action, moving averages are lagging indicators in general. Thus, a golden cross must be left on the chart when all the consolidation ends; otherwise, the looming death cross signal could have truly deadly implications.

With Litecoin's halving scheduled for under 45 days from now, anything is possible. So, is it really the end for LTC's price or is this just another bump in the road? Only time will tell.