Whales got rid of $27 million worth of Litecoin: does it threaten the price of LTC
Date: 2023-09-03 Author: Karina Ziganova Categories: BLOCKCHAIN
Litecoin failed to break above $70 during a small price bounce earlier in the week as the whales remain unsure about the outlook for LTC.
In August, large investors were actively getting rid of Litecoin, and open interest in LTC in the derivatives futures markets was rapidly falling. We are figuring out whether it is worth fearing that the asset price will fall below $60.
Whales sold 430,000 Litecoins
The bearish sentiment of large Litecoin holders seems to be one of the main factors amplifying the current downward price trend. According to the analytical platform Santiment, from July 31 to August 31, the total reserves of wallets with a balance of 10,000 to 10 million LTC decreased by 430,000 coins.
With a current market value of $63, the tokens sold by the whales over the past month are valued at around $27 million. If retail investors follow suit, LTC will be in danger of falling below the critical support level of $60.
Open interest on LTC futures has halved
The current situation in the derivatives market further exacerbates the position of LTC. Open interest in Litecoin futures fell to its lowest level since November 2022 at $238 million, down 56% from the $543 million recorded in early August, according to Coinglass data.
The open interest indicator reflects the total value of active or outstanding derivative contracts. A downtrend is a serious bearish signal indicating insufficient capital inflows.
Litecoin Price Prediction: Drop Below $60
According to the Global In/Out of Money Around Price metric, which reflects the distribution of purchase prices of current Litecoin holders, 70% of investors are now at a loss.
If the bearish sentiment continues to gain momentum, LTC is in danger of a free fall to $50. However, as shown in the chart below, the 1.17M addresses that bought 4.84M coins at an average price of $54 would provide significant support to the asset.
In the event of a rebound and consolidation above $75, the initiative will again go to the bulls. However, the rally may not last long: 375,000 wallets that purchased 3.7 million Litecoin at a maximum price of $70 may exit positions and provoke another pullback.
