Litecoin (LTC) has broken through a key uptrend line that has capped its downward attempts since 2018, including times when it coincided with macro bottoms.
This level previously absorbed the sell-off during the crypto winter in 2018, the liquidity shock of March 2020, and the contraction resulting from policy tightening in 2022. Missing this lower bound changes Litecoin’s long-term structure, suggesting that sellers have regained control on higher timeframes.
LTC/USD 2-week price chart. Source: Trading View
Macro headwinds are worsening for Litecoin
The technical collapse comes amid rising overall pressure across risk assets. Global markets were rocked by a sharp decline in AI-related stocks, as investors reassessed extended valuations after a busy rally.
Nasdaq Composite daily chart. Source: Trading View
The decline extended to cryptocurrencies, which have increasingly traded as a high-beta extension of technology stocks over the past year.
Meanwhile, weaker-than-expected US jobs data added to increased volatility.
Slowing payroll growth and growing unemployment fears have fueled concerns about a late-cycle economic slowdown, prompting capital to shift away from speculative assets to cash and short-term bonds.
“The number of Americans working multiple jobs has reached a record 9.3 million, surpassing peaks seen during the 2008 financial crisis and the 2020 crisis.” books Global Markets Investor on X on February 5, adding that “the labor market is weak.”
US Labor Market Variation: Source: US Bureau of Labor Statistics
For cryptocurrencies like Litecoin, this environment has translated into lower quotes and faster downward movements.
LTC’s position below all major EMAs reinforces the bearish tone, while momentum indicators remain weak. The 2-week RSI is drifting towards oversold territory but has not yet indicated exhaustion, leaving room for further declines before a solid base is formed.
LTC/USD 2-week price chart. Source: Trading View
If macro headwinds persist, Litecoin risks a slide towards the psychological level of $50, with a deeper pullback exposing the $36-40 area that characterizes the pre-2021 buildup. A rebound above the previous trend line will be needed to stabilize the structure.
Until then, Litecoin remains vulnerable to further losses amid fragile risk sentiment.
