A drop in Litecoin price opens opportunities for short sellers

Short sellers see the price drop of Litecoin as an opportunity. The prices of Litecoin have dropped to the range it was within back at the start of February. This drop has further shifted the bias of the bears in the market.

The market observed a high selling pressure a few days ago as the price drop indicates along with substantial trading volume accompanying the drop. The same phenomenon was observed with Bitcoin quite recently in fact when its price dropped to $22k from $23.5k. But despite that drop, the bulls were expecting improvement later on however it’s not the same with Litecoin.

An opportunity for the short sellers is if the fair value gap is partially filled

The crypto market observed a sharp reduction in the prices of Litecoin. They dropped from $95.4 to $88.8. even though it went to a $90.5 low but it was still in the bullish market zone. The drop indicated that the drop was pretty much in the favor of the bears which made them strongly in control. If it closed below the bullish order block, this would reinforce the bearish bias.

The drop also created a large imbalance on the charts. While not all imbalances fill completely, there is a possibility that they could fill 50%. If this happens, Litecoin’s price could rise to the $92.8 resistance level before being rejected.

The RSI Relative Strength Index is below neutral since March 2 which is an indicator of a bearish trend. Additionally, the On-Balance-Volume (OBV) was at a support level from February, indicating that selling pressure was dominant in March. The market was still on the edge as even a partial fill-in FVG can turn the tables in the favor of bulls.

A drop in the prices also indicated the dominance of bears in the market

The price of Litecoin has dropped in the last 24 hours. The Open interest has suddenly started increasing in recent hours. the entire situation tells that the short sellers are entering the market and that it is becoming favorable for the bears.

There is expected to be a further sharp drop in Litecoin prices in the near future.