Litecoin price slips and could see a broader fade back to support as markets roll over
- Litecoin prices see markets opening laden with negative sentiment as European energy crisis rattles markets.
- LTC price faces headwinds from the energy crisis with dollar strength weighing on price action.
- Expect to see a possible downside as investors flee to safe havens.
Litecoin (LTC) price slips over 1% in ASIA PAC and European trading after Russia halts gas supplies to Europe. Not only does this mean trouble for the European bloc as its energy needs and reserves for the winter will be left wanting but the financial knock on effects, as gas prices jump over 30% in Europe, may lead to big margin calls for several energy suppliers, and the risk of default threatening on the horizon.
LTC price under pressure by energy margin calls
Litecoin price is sitting in the crosshairs from the domino effect caused by the shutdown of the Nordstrom I pipeline over the weekend; with no gas flowing into Europe, the European gas futures have jumped 30% in trading early Monday, demanding bigger margin calls for energy suppliers to buy and hold those same contracts. For some, that means billions of euros that need to be put aside to meet those obligations, putting them at risk of default, with several EU countries setting up rescue packages to bail them out.
LTC price is feeling the strain, with investors pulling their cash away from cryptocurrencies and the dollar roaring back as it continues its rally on the back of Friday’s relatively positive US job report. LTC price is likely to initially drop to support near the 55-day Simple Moving Average and the monthly pivot around $57.50. Should these pressures persist into tomorrow and Wednesday, expect to see another leg lower towards $48.60 with the monthly S1 support handle coming into play.
LTC/USD Daily chart
As often seen these past few weeks, a down day on Monday often means a positive close by Friday. So it is possible that once markets have grown accustomed to the issue and with several countries setting up rescue packages and bailing out energy companies, the issue will be successfully addressed and solved. That would spark a turnaround, with $65.08 being tested for a breakout. Should that breakout occur, expect to see a weekly close above $70 by Friday.
Author
Filip Lagaart
FXStreet
Filip Lagaart is a former sales/trader with over 15 years of financial markets expertise under its belt.
