Why Litecoin (LTC) has little chance of returning to the $100 mark, despite the revival of the crypto market
Date: 2023-08-30 Author: Karina Ziganova Categories: BLOCKCHAIN
Last week, the price of Litecoin (LTC) dropped to a 2023 low, culminating in a crash after the third halving.
On August 29, LTC briefly touched $70 as the cryptocurrency market reacted to Grayscale Investments' landmark victory in its case against the US Securities and Exchange Commission (SEC). However, the readings of key on-chain metrics hint that it is still too early to hope for a recovery in the Litecoin price.
The price drop affected the number of transactions in the Litecoin network
Litecoin has become widely known for being a cheaper and faster alternative to the Bitcoin network for peer-to-peer transactions. The recent price correction seems to have brought this property of the blockchain to the fore.
The Santiment chart below shows that between July 25 and August 29, daily transaction volume increased by 41% from 10.34 million LTC to 14.6 million LTC.
The Transaction Volume indicator sums up the total volume of transactions with tokens per day, and its growth means an increase in demand for Litecoin. However, another key indicator shows that LTC is still far from a major price breakout.
Traders remain bearish on LTC
Grayscale's victory over the SEC yesterday did not affect the mood of traders regarding Litecoin. According to the market depth chart, they placed 277,340 active sell orders and 264,760 LTC buy orders.
The Exchange On-chain Market Depth chart shows the volume of orders placed on centralized exchanges. At the moment, LTC supply exceeds demand by more than 12,500 coins. This suggests that even despite the increase in transactional activity, the price of Litecoin is under serious pressure.
LTC Price Prediction: $80 Resistance May Be Formidable
Given the mood of traders, the price of Litecoin is likely to continue trading below $80.
This forecast is also supported by the Global In/Out of Money Around Price (GIOM) data, which reflects the distribution of purchase prices among the current holders of the asset. Even if the bulls gather their strength, 1.25 million addresses that purchased 8.84 million LTC at an average price of $78 will stand in their way, and another wall of 1.66 million wallets with a balance of 14.81 million coins bought at the mark $88. A breakthrough of such powerful resistance looks unlikely.
Strengthening bearish sentiment in the market will lead to another fall below $60. The 401,000 investors holding 5.14 million Litecoin at an average price of $65 could slow down the downside. But if they fail, LTC will hit a new 2023 low at the key $50 level.
