- Litecoin price drifted upwards on Monday this week.
- It has formed a head and shoulders pattern on the 4H chart.
- The fear and greed index remains in the green area.
The fear and greed index remained in the greed area even as investors reset their expectations about the Federal Reserve. Litecoin price rose for the second straight day as stocks and other cryptocurrencies sell-off took a breather. It was trading at $95.36, the highest point since February 22.
Fear and greed index steady
There is a sense of fear in the financial market following the strong inflation numbers from the United States. The headline and core PCE numbers published on Friday showed that inflation remained stubbornly high in January.
As a result, a somber mood has engulfed the financial market as investors assess the outlook of the Fed. In an interview on Friday, Larry Summers warned that the Fed will struggle to reach its inflation target of 2.0%.
In another interview, Fed’s Loretta Mester warned that the Fed needed to get more aggressive still the inflation battle has not been won yet. She supports another 0.50% rate hike in March. Analysts at ING believe that the Fed will deliver three 0.25% rate hikes in the next three meetings.
Read more: How to buy Litecoin in 2023.
Meanwhile, Mark Wilson, a senior analyst at Morgan Stanley, believes that the financial market is going through a relief rally. He expects that the S&P 500 index will plunge by another 20% to about $3,000. If this happens, cryptocurrencies like Litecoin and Bitcoin could underperform.
The fear and greed index, which is a popular gauge on market sentiment, remains at the greed area of 62. This level is below where it was a month earlier, when it moved to 69. Still, it is signaling that investors are still greedy in the market. In most periods, risky assets like LTC and BTC tend to do well when there is greed in the market.
Litecoin price forecast
We have covered the recent outperformance of Litecoin prices several times before. On the 4H chart, we see that LTC price pulled back and reached a low of $90.12 last week. This was a notable level since it was also the lowest point on February 9. It has moved above the 50-day moving average.
At the same time, Litecoin has formed what looks like a head and shoulders pattern. It is now forming the right shoulder. As such, it has some more upside in the coming days. If this happens, the LTC/USD pair will likely rise and reach the resistance point at around $101.
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