Litecoin (LTC) is one of the few altcoins that has shown price dominance over BTC and outperformed major crypto assets, but the LTC price has now dropped to as low as $95, reflecting a 15% drop in a week, before recovering back to the $100 threshold at the time of writing.
Despite the drop, crypto analyst Ali Martinez believes that the (MVRV) ratio is hinting at a positive recovery for Litecoin.
MVRV ratio suggests bullish signal
According to crypto analyst Ali Martinez, the MVRV indicator signals that LTC remains in a healthy position despite recent market volatility, especially BTC’s sharp drop below $82,000.
The MVRV ratio is an important metric that helps traders assess whether an asset is overvalued or undervalued. A low MVRV indicates that the asset is in an accumulation phase, while a high MVRV signals the possibility of profit-taking by investors.
Looking at Ali Martinez’s latest chart, Litecoin’s MVRV ratio remains strong even after retracing to the psychological support level of $100. This shows that long-term holders remain confident and selling pressure is relatively low.
However, if this trend continues, Litecoin could see a significant increase to $108 and further to $117.
Litecoin Under Pressure As Key Events Approach
Litecoin’s recent decline has worried traders, especially after it was removed from the US Strategic Crypto Reserve. This decision has made many investors more pessimistic, leading to an increase in short positions.
While some traders are still hopeful about the approval of the Litecoin ETF, other major events could impact the market first. The White House summit and the US Non-Farm Payrolls (NFP) report are expected to shape investor sentiment in the coming days.
With Litecoin currently trading around the crucial $100 level, the risk of further price declines is increasing if bulls do not step in soon.
Bears target a drop to $85
Litecoin price has turned bearish after a strong rally in February. The recent decline has pushed LTC near the lower Bollinger Band at $102.77, indicating oversold conditions and increased volatility.
If the bulls fail to reclaim the support at $100, the bears could push the price down to the next major support level at $85, a level that has historically seen strong buying demand. Even the Relative Strength Index (RSI) is at 37.62, suggesting that Litecoin is approaching oversold territory.
