Litecoin price has been facing significant downward pressure in recent weeks, reaching its lowest level of the year. Over the past week, the price of LTC has dropped by 5.55%, and over the past three months, it has seen a decline of 33%. In the year-to-date, LTC has experienced a 12% decrease in price. However, it is worth noting that LTC remains 22% higher compared to its price from the same period last year. Despite its decline, Litecoin still maintains a total market capitalization of $4.5 billion, placing it in the 15th position among cryptocurrencies, just below Polkadot.
One of the factors contributing to the decline in Litecoin price is the lackluster on-chain metrics. Following its successful third halving event in August, Litecoin experienced a drop in price due to profit-taking from investors who had invested in the digital asset leading up to the price surge triggered by market expectations surrounding the halving event. On-chain data from BitInfoCharts shows that the number of daily transactions for Litecoin has been steadily declining since the halving event. In May, Litecoin recorded over 584,000 daily transactions, but this number has dropped to 104,000 transactions in October. This decline indicates a lack of interest from investors, resulting in a decrease in risk appetite.
Litecoin has historically exhibited a high correlation with Bitcoin, making it susceptible to the volatility of the leading cryptocurrency. In addition to its correlation with Bitcoin and broader market trends, Litecoin’s price is influenced by the activities of its whale addresses. Although these whale addresses control approximately 11% of the circulating supply of LTC, their buying and selling activities trigger market movements.
Despite these challenges, there have been recent improvements in Litecoin’s daily transaction volumes. The total volume of LTC traded in the past 24 hours has experienced a nearly 14% increase, suggesting the possibility of a price reversal.
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When analyzing the technical aspects of Litecoin’s price, the daily chart reveals that LTC has been trading within a tight range of $61 to $65 in recent days. Since the halving event, the altcoin has dropped by more than 45% from its peak of $114 earlier this year. It has failed to surpass the crucial level of $72.65 since the halving event.
Furthermore, Litecoin remains below the 50-day and 200-day exponential moving averages, as well as the 50-day and 100-day simple moving averages. The Relative Strength Index (RSI) has fallen below the signal line, indicating an increase in selling pressure. The Moving Average Convergence Divergence (MACD) indicator is also signaling a “strong sell” for Litecoin.
Considering these technical indicators, it is likely that Litecoin’s price will continue to decline in the coming sessions, with bears targeting the immediate and crucial support level at $60. If the price falls below this level, it could further push LTC down to its lowest point of the year at $56. However, if LTC manages to breach the 50-day Exponential Moving Average (EMA) at $65.90, it could initiate a price reversal and potentially lead to further gains to $72.65 and $84.
In conclusion, Litecoin’s price has been impacted by various factors, including profit-taking after the halving event, declining on-chain metrics, and its correlation with Bitcoin. While the current trend indicates a bearish sentiment, recent improvements in daily transaction volumes may present an opportunity for a potential price reversal. However, traders and investors should closely monitor the market and consider the technical indicators before making any decisions regarding Litecoin.
