Long-term holders sell Litecoin: will LTC avoid a collapse
Date: 2023-07-29 Author: Karina Ziganova Categories: BLOCKCHAIN
The price of Litecoin (LTC) is holding near the $90 mark, despite the negative sentiment around the upcoming halving
Historical data for 2015 and 2019 shows that Litecoin has already met halving in a downtrend. As this important event approaches, long-term LTC holders are getting rid of the coins for fear of a potential price collapse. Let's figure out whether the scenario of past years will be repeated this time.
Litecoin investors changed their mood to bearish
The price of Litecoin is down 18% after reaching a local peak of $115 on July 3. The reason for the fall was the growing fears of long-term holders on the eve of the halving, which forced them to actively sell off stocks.
Confirmation of this can be seen in the Age Consumed chart of the Santiment platform. This metric tracks the current trading sentiment among long-term holders. It is calculated by multiplying the number of recently sold tokens by the number of days that have passed since their last move. Constant jumps in the indicator indicate that long-term investors are selling more and more LTC, which may adversely affect the price.
This phenomenon is reflected in the depth of the exchange market. The number of orders to sell Litecoin has exceeded the number of buy orders: the current surplus is almost 126,000 LTC. This indicates an excess of supply over demand, which usually puts downward pressure on asset quotes.
Network activity is gaining momentum
In addition, the Litecoin network saw a significant increase in the number of active addresses this week. The graph below shows that between July 20 and July 26, the number of wallets transacting with LTC increased by 37%, from 221,000 to 303,000.
Constant jumps in the number of active users indicate an increase in the volume of transactions. However, it cannot be regarded as an unequivocally positive sign. This may also mean that more and more traders are making speculative trades in anticipation of the upcoming halving.
LTC Price Prediction: The Asset Should Hold the $85 Level
The $85 support level is critical: its breakdown could lead to a larger correction in the price of Litecoin. However, the bulls still have a chance to provoke a rebound. However, updating the new annual maximum looks unlikely, since for this they will have to overcome the resistance of 1.13 million addresses that bought 16.64 million LTC at an average price of $100.
As the halving approaches, the future of Litecoin remains uncertain. While historical trends raise concerns, the cryptocurrency market is notoriously unpredictable. Traders and investors should exercise caution and consider all risks before making any decisions.
