Litecoin price has sank recently along with the greater crypto market, despite not being named a security by the US SEC.

The downward pressure has the altcoin at risk of forming a death cross on the daily timeframe. Although the signal sounds ominous and often indicates a downtrend is coming, it might not be lights out for LTC after all. Let’s take a look.

Lackluster Litecoin Performance Ahead of Halving Attributed to SEC

With Litecoin’s halving just weeks away, the currently eleventh-ranked cryptocurrency by market cap was expected to perform better than it has.

Fundamental and technical signals both point to LTC being undervalued, yet the coin has suffered alongside other altcoins from SEC-related sell pressure.

The US SEC is trying to kill the crypto industry, and its causing LTCUSD daily charts to inch closer to an ominous death cross.

Its this a valid breakout of the downtrend line? | LTCUSD on TradingView.com

Doing A Double-Take On The Daily LTCUSD Death Cross

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. But not always.

A closer look at the 2020 death cross into golden cross | LTCUSD on TradingView.com

The chart above shows an example of a previous death cross from late 2020, which immediately rolled into a golden cross as soon as Litecoin found some support and started rising again.

LTCUSD went on a massive rally lasting several weeks of upside. For this situation to repeat, Litecoin absolutely has to recover from current levels and resume its formerly bullish momentum. Otherwise, a death cross could lead to renewed selling from investors who expected more out of the halving.

Death cross and golden crosses can sometimes trigger back and forth in a choppy market, which is a drawback of using moving averages as trading signals. This is due to volatile price action pulling the faster moving average back and forth through the slower moving average. Furthermore, as an average of price action, moving averages are lagging indicators in general.

A golden cross must be left on the chart when the 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.

According to a Reuters report, Crypto entrepreneur Do Kwon, the former CEO of Terraform Labs, has been sentenced to four months in prison by a court in Montenegro for allegedly using forged passports.

A sudden upward surge has given rise to conjecture regarding the activities of influential market players, commonly called “whales,” who may leverage the price decline to amass Bitcoin holdings.

Given the increasing allure of the cryptocurrency market, it is imperative to scrutinize recent occurrences that affect Bitcoin’s trajectory significantly.

This examination will delve into these advancements and their possible ramifications on Bitcoin’s future prospects, particularly their impact on price patterns.

• Bitcoin’s price witnesses a notable bounce of $1,000 from a critical support level of $25,000, indicating a significant recovery.
• Dormant Bitcoin holdings, which had remained untouched for over a decade, are suddenly being moved, raising questions about the motives behind these transfers.
• Bitcoin gains momentum by breaking above a downward trendline resistance level of approximately $26,000, suggesting a bullish market sentiment and potential for further upward movement.

Intriguing Movements And Price Implications

A notable development has unfolded as a dormant stash of Bitcoin, valued at over $1.2 million, has suddenly come alive after lying dormant for over 13 years.

Blockchain data reveals that a whale initiated a transfer of 50 BTC to another wallet on Thursday.

These particular coins were originally mined in June 2010 and have remained untouched.

This recent movement follows a trend of previously inactive Bitcoin being set into motion.

In April, a remarkable event occurred when an investor, who had held their coins for a decade, transferred a staggering $7.8 million worth of Bitcoin to new wallets.

Just days later, another long-term investor or group of investors moved $11 million worth of the digital asset after 11 years of inactivity.

The movement of these long-dormant Bitcoin holdings raises intriguing questions about the motivations behind such transfers.

Additionally, the heightened interest and trading activity stemming from these movements can impact the dynamics of supply and demand, potentially exerting a significant influence on the overall price of Bitcoin in the near term.

Bitcoin Breaking Resistance And Bullish Prospects

Bitcoin has exhibited a surge in momentum as it successfully broke above significant downward trendline resistance, around $26,000.

From a technical perspective, a closer examination of the four-hour timeframe reveals that Bitcoin has surpassed the crucial resistance level of $26,000.

This level carries both psychological significance and is bolstered by a downtrend line.

The closure of candles above the $26,200 level signifies a prevailing bullish sentiment in the market.

Moreover, BTC peaked at approximately $26,450 before undergoing a minor bearish correction.

However, it found support at the previously tested resistance level of $26,250, which now acts as a support level.

With candles closing above the $26,200 mark, the bullish trend may continue, with the next resistance level at $26,850 as the target.

Featured Image From iStock, Charts From TradingView