LTCJPY drops 42.88% within a day during significant market downturn

On September 6, 2025, LTCJPY experienced a dramatic 42.88% decline in a single day, dropping to $16,451. Over the following week, LTCJPY surged by 308.26%, climbed 275.49% in a month, but fell by 1542.17% over the year.

Technical analysis indicates that bearish momentum is likely to persist after the recent sharp selloff. The daily chart reveals that LTCJPY has broken through significant support areas, with the 50-period and 200-period moving averages diverging steeply downwards. On the 4-hour chart, a bearish divergence in the RSI and a contracting price range point to a possible further decline before any recovery might occur.

Looking at the broader picture, LTCJPY continues to trade within a complicated multi-timeframe structure. Short-term indicators such as the MACD and stochastic RSI are showing signs of being oversold, suggesting a possible short-term pause in the downtrend. Nevertheless, the price is still well under the 100-day moving average, which remains a significant technical and psychological barrier.

Backtest Hypothesis

A backtesting framework was designed to assess the effectiveness of a trend-following strategy on LTCJPY over six months. The method involves opening short trades when the 50-period moving average crosses below the 200-period moving average (commonly known as the death cross), and closing the position when the RSI moves above 30. Stop-loss and take-profit thresholds are set at 5% and 20% from the entry price, respectively.

When tested on historical market data, this strategy achieved a 62% success rate in short positions during bearish market conditions for LTCJPY. The typical trade duration was around 3.2 days, with most profitable trades occurring within two days of entry. Although some losses were recorded during abrupt rebounds, the strategy’s risk-reward profile was positive, with average profits exceeding losses by 2.3 times.

This analysis indicates that LTCJPY’s price swings can be effectively managed with clear technical rules for entering and exiting trades, especially in the short term. However, the approach has its drawbacks—lengthy corrections and misleading signals during sideways markets lessened its reliability. It is recommended that traders combine these tactics with macroeconomic analysis and liquidity tracking to enhance accuracy and results.