In the past 30 days, the price of Litecoin (LTC) has experienced a downward trend, dropping nearly 30% since its halving event. This decline has presented investors with a tempting chance to heavily accumulate the altcoin. However, even with increased accumulation at its lower price points, Litecoin has not managed to generate sufficient buying pressure. Consequently, a steep drop could be imminent if LTC falls below its support level, regardless of any ongoing accumulation.
Confidence Among LTC Holders Declines
Following Litecoin’s halving event in early August, the altcoin has alternated between periods of consolidation and decline. This pattern has fueled discussions about whether LTC can replicate its past post-halving surges.
According to data from Glassnode, the Hodler Net Position Change stood at 362,378. This metric tracks the monthly position shifts among long-term investors of a particular asset. A negative value suggests a mass liquidation.
Conversely, a positive Hodler Net Position Change indicates that long-term holders, or HODLers, are acquiring new positions. The chart reveals that a considerable amount of LTC was sold off before the halving event. However, the subsequent shift towards significant accumulation suggests that HODLers have renewed confidence in Litecoin’s price trajectory, potentially signaling a new peak in the near term.
Interestingly, Litecoin’s OI-Weighted funding rate has risen from -0.025% on August 20 to 0.004%. Positive funding rates indicate bullish sentiment, as long-position traders pay short-position traders to maintain their contracts. However, the average balance metric has been declining steadily as it dropped from a high of $671 on 13 August to $528 as of today.
This indicates declining trader confidence in holding Litecoin, as there’s a possibility of a significant drop if LTC fails to generate enough buying pressure to maintain its crucial $60 support level.
What’s Next For LTC Price?
Litecoin’s price recently attempted to break above the consolidation by surging above $66-$67; however, it couldn’t maintain those gains, indicating a strong bearish defense at that level. As of writing, LTC price trades at $65.03, declining over 0.7% in the last 24 hours.
The declining moving averages and RSI struggling around the midline suggest that bears are still dominating the market. Sellers are aiming to pull the price toward the lower end of the consolidated pattern, and if successful, we could see LTC price testing the $60 support level.
A decline below $60 will initiate a strong selling sentiment, plunging Litecoin’s price toward $47. Conversely, bulls aren’t giving up easily, as they’re expected to defend the support zone of $60 and aim to push the price above the 50-day EMA of $66. If they manage this, it would imply that the LTC price could continue to fluctuate within a bullish zone and might surge toward $76.
