Litecoin price was in a tight range on Thursday as investors started to reposition their assets for September. The LTC coin rose slightly to a high of $55.80, which was slightly above this week’s low of $52.36. Its market cap stands at over $3.2 billion.
Hawkish Federal Reserve
Litecoin price has been under pressure as investors focus on the hawkish tone by the Federal Reserve. In a statement at the Jackson Hole Symposium at Wyoming, Jerome Powell insisted that the bank will continue hiking interest rates in the coming months.
His sentiment was shared by other Federal Reserve officials like Charles Evans and Neel Kashkari. In a statement on Wednesday this week, Cleveland Fed’s Loretta Mester said that the bank will continue hiking and also maintain high interest rates until inflation moves to 2%.
Historically, cryptocurrencies like Bitcoin and LTC tends to underperform in periods of a hawkish Federal Reserve. This also explains why cryptocurrencies and stocks have continued their bearish trend in the past few months. Indeed. American stocks have fallen in the past five straight days.
Litecoin price has also underperformed because of the sluggish demand for the coin. With cryptocurrencies down by more than 50% this year, many users of LTC have stayed away. This is evidenced by on-chain data that show weak demand in the ecosystem.
Meanwhile, the coin has lagged because of the significantly strong US dollar. The US dollar index has jumped to the highest level in over 20 years. Litecoin and other cryptocurrencies have an inverse correlation with the US dollar.
Litecoin price prediction
The daily chart shows that the LTC price has been under pressure in the past few months. It has fallen by 86% from the highest level in 2021. A closer look shows that the coin has formed a bearish flag pattern, which is usually a bearish sign.
It has moved below the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has moved below the neutral point at 50. Therefore, there is a likelihood that the coin will have a bearish breakout in September. If this happens, the next key support level to watch will be at $40.