Litecoin Price Analysis: LTC/USD has a chance to recover towards $40.00

Litecoin (LTC), the sixth-largest digital asset with the current market capitalization of $2.3 billion, has been losing ground rapidly. LTC/USD has lost about 6.5% of its value in recent 24 hours to trade at $37.11 at the time of writing. 

Litecoin is moving in sync with the market. Therefore, it is vulnerable to bearish sentiments on the broad cryptocurrency market and may regain some ground if the market starts a recovery. As the liquidity is decreasing ahead of the Christmas holiday period, the coin may demonstrate sharp movements in either direction. 

Litecoin's technical picture

On a daily chart, LTC/USD broke below the Bollinger Band to trade at $37.12, off the recent low of $36.28. The daily RSI (Relative Strength Index) is demonstrating signs of reversal from the oversold territory. This technical setup implies that the price may regain some ground with the first recovery target created by the lower line of the daily Bollinger Band at $38.23. Once it is out of the way, the upside is likely to gain traction with the next focus on psychological $40.00 and $44.00 ( the middle line of the daily Bollinger Band). Notably, this area served as a resistance at the beginning of December. 

If the sell-off resumes, LTC/USD may retest the recent low of $36.28 and continue the decline towards the lower line of the Bollinger Band on a weekly chart ($35.50). If this area gives way, a psychological $30.00 will come into view. The last time LTC traded below this handle was in January 2019. Once it is out of the way, we will be mainly in uncharted territory. 

LTC/USD daily chart