Litecoin (LTC) price has stagnated within the $65 – $68 territory after failing to break above $70 during the mild price bounce earlier this week. With whale investors now closing their positions, on-chain analysis explores LTC price prospects for the coming weeks.
Litecoin whales seem unconvinced about LTC price prospects, having sold many coins last month. With the LTC Futures derivative markets offering little hope, is Litecoin in danger of dropping below $60?
Litecoin Whales Offloaded 430,000 Coins in August
The bearish mood among Litecoin whales seems to be a major factor escalating the current LTC price downtrend. According to on-chain data compiled by Santiment, crypto whales holding 10,000 to 10 million LTC entered a selling spree in August.
The chart below illustrates that on July 31, they had 47.12 million coins in their balances. But by August 31, it had reduced considerably to about 46.7 million LTC, showing that they had offloaded 430,000 coins.
At the current market value of $63, the tokens sold by the whales over the past month are worth approximately $27 million. When whales sell such many coins within a month, it shows they negatively affect LTC price prospects.
Considering how influential whales are in blockchain communities, it’s only a matter of time before retail investors begin to mirror their trades. This could potentially put LTC’s price in danger of dropping below the critical $60 support level.
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Investors are Moving Capital Away From Litecoin Markets
To compound Litecoin price woes, recent activities in the LTC derivatives markets have also been trending bearish. According to Coinglass, a crypto derivatives data analytics platform, LTC Futures Open Interest has now dropped to its lowest since November 2022, when the infamous FTX crash nuked the crypto markets.
As shown below, as of Sept 1, LTC Open Interest currently sits at $238 million, a staggering 56% decline from the $543 million recorded at the beginning of the month.
Open Interest summarizes the total value of an asset’s active or unsettled derivative contracts. A downtrend in Open interest is a significant bearish signal, indicating a dearth in capital inflows.
Notably, the timing of this 56% decline in the Litecoin Open Interest suggests that Futures market investors are reacting cautiously to the recent Halving event that took place on Aug 2.
In conclusion, the dearth of capital flows and the whale’s bearish trading activity could send Litecoin price below $60 in the coming weeks.
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LTC Price Prediction: Possible Retracement Below $60
The Global In/Out of Money Around Price data depicts the purchase price distribution of current investors on the Litecoin network. It shows that LTC’s 33% negative price performance in August has plunged 70% of current holders into losses.
If this widespread dysphoria triggers a panic sell-off, Litecoin’s price is in danger of a freefall toward $50. However, as shown below, 1.17 million addresses had bought 4.84 million LTC at the average price of $54. They could offer considerable support, making last-ditch attempts to cover their positions.
But, if those efforts fall flat, Litecoin could drop deeper into the danger zone below $50.
But, if Litecoin’s price rebounds above $75, the bulls could seize the momentum again. However, the 375,000 addresses had bought 3.7 million LTC at the maximum price of $70, which will pose significant resistance.
But if that resistance caves, then Litecoin could eventually reclaim $75.
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