Litecoin Drops Below $90 Amid Halving Hopes and Bearish Signals

Litecoin (LTC) has recently fallen below the $90 mark, sparking a debate among investors and analysts about whether this price drop presents a buying opportunity or serves as a warning sign. The price of LTC has been fluctuating between $85 and $87, indicating a battle between optimistic buyers and cautious sellers. Some investors view the dip as a potential buying opportunity, particularly in light of the upcoming halving event and speculation surrounding a potential exchange-traded fund (ETF) for Litecoin. The halving, which is expected to reduce the block reward for miners, could potentially drive up the price of LTC due to decreased supply. Additionally, the anticipation of an ETF could attract more institutional investors, further boosting demand.

One bullish trend shift can be identified from the 90-day Spot Cumulative Volume Delta (CVD), which gauges the balance between market buy and sell pressure. After remaining negative and at times neutral since December 2024, the Spot CVD flipped positive on June 28. This shift signals a return to a “taker buy dominant” phase, suggesting that market participants are stepping in to buy LTC at current prices.

However, there are also bearish indicators that suggest caution. Key indicators and on-chain data point to downward pressure on LTC, with the market trend exhibiting increased bearish signals. The price of LTC is currently hovering around $84, and the MACD (Moving Average Convergence Divergence) shows a bearish crossover, indicating potential short-term weakness. Furthermore, recent whale activity, where large holders have offloaded significant amounts of LTC tokens, has raised concerns about a potential correction. This bearish sentiment is further supported by the fact that LTC is trading slightly below its 20-day moving average, which could signal a continuation of the downward trend.

Despite these concerns, some analysts argue that LTC is holding above critical short-term moving averages, creating a base between $85.04 and $85.23. This could indicate that the coin is finding support at these levels, potentially setting the stage for a rebound. However, upward momentum has yet to materialize, leaving the direction of LTC's price movement uncertain.

Seasonality might dampen short-term expectations. Data shows that August and September are historically the weakest months for LTC, posting negative returns of 6.99% and 5.06% on average since 2012. However, this is typically followed by a significant turnaround in the Q4, with November being the best-performing month historically for LTC with 94.79% returns on average.

If approval is granted, the ETF decision coincides with the seasonal pivot in LTC’s performance, setting the stage for a potential rally. Combined with the ongoing shift in onchain buyer behavior, current price weakness may be less of a warning sign and more of a strategic accumulation zone.

LTC’s current price structure is mirroring its 2024 trajectory. After a strong Q1 rally earlier this year, LTC entered a correction phase and remained suppressed below a descending trendline throughout Q2. The price has retested a high-conviction daily demand zone, which previously acted as a base for a breakout in Q4 2024. A steady accumulation within this demand zone could trigger another rally. In late Q3 last year, LTC broke above the descending trendline and reclaimed the 50-day and 200-day moving averages, a key confirmation of bullish strength. This led to a sustained rally to new yearly highs in Q4. A breakout above the trendline and bullish reclaim of these moving averages would provide strong technical validation for upside continuation heading into Q4 2025.

The upcoming Q4 2025 could be a pivotal period for LTC, with multiple factors suggesting that it could be an exciting time for the altcoin. The halving event, ETF speculation, and the overall market sentiment will all play crucial roles in determining LTC's future price trajectory. Investors are advised to conduct thorough research and consider these factors before making any investment decisions.