Journalist
Posted:
- LTC may rebound far higher than $72 in the coming days.
- Long-term holders have hesitated from liquidating their LTC positions.
Litecoin [LTC] is one of the major altcoins experiencing intense negative sentiment, according to data from Santiment. AMBCrypto checked the crypto analysis tool and found out that the coin’s Weighted Sentiment was down to -2.415.
Weighted Sentiment measures the unique social volume concerning the perception the market has about a project.
So, the decline in the metric implies that the broader market was not bullish on LTC. It might seem like the market is right to lower their expectations for LTC.
Source: Santiment
This is because the coin has been consolidating between $70 and $73 for the last few days.
While the sentiment tilts toward Fear, Uncertainty, and Doubt [FUD], it could also be the catalyst that triggers a bounce for LTC. This is because, historically, extreme negative sentiment is a sign of a bullish recovery.
In an interesting twist, Litecoin’s bullish trait was not only shown in its short-term projection, but there was a glaring sign shown by the Liveliness.
Liveliness decreases as long-term holders accumulate to HODL. HODL is an acronym for Hold On to Dear Life, and it implies that investors buy tokens to keep for a long period.
If the Liveliness decreases, then it means long-term holders are liquidating their position. At press time, Litecoin’s Liveliness was 0.70, indicating that accumulation was more present than distribution was.
Source: Glassnode
AMBCrypto also checked the technical part of LTC if accumulation outpaced distribution.
According to the Accumulation/Distribution (A/D) indicator, there were more buy orders than sell ones for the coin. This implies that LTC has the potential to rise much more than $72 in the short term.
The 4-hour LTC/USD chart also considered the Relative Strength Index (RSI).
At the time of writing, the RSI was 56.55. This was a sign that LTC had exited its overbought state and may head southward. Should buying pressure increase for the coin, then a move in the $80 direction may now be invalidated.
Source: TradingView
Another metric to consider is the funding rate. Funding rates represent the difference between the spot price of a cryptocurrency and the perpetual futures market price.
If the funding rate is positive, it means traders are bullish on the price action. On the other hand, a negative funding rate suggests a bearish sentiment.
At press time, LTC’s funding rate was 0.023%. This reading suggests that there are more bullish positions open in the market than shorts.
The rebound prospect was also supported by social dominance. Social dominance compares the discussion around an asset with others in the top 100.
Source: Santiment
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Litecoins’ social dominance at the time of writing had dropped to 0.515%. This implies that there was not a lot of hype around the coin.
In terms of the price action, it means LTC was nowhere near its local top. Therefore, there is a high likelihood of an upside.
