Litecoin (LTC) encountered a substantial setback after a week of steady expansion, giving rise to apprehensions regarding its future prospects. Compared to Bitcoin, LTC's value has sunk by 55% over the last five months. This steep decline indicates investors' eroding confidence, as many purses have liquidated their LTC holdings.
Small Litecoin Investors Are Washed Away
According to Santiment, 199,000 purses that contained Litecoin a week ago no longer hold the digital currency. Notably, most of these purses are held by small-scale investors. Smaller investors, frequently more susceptible to market volatility, are abandoning their holdings, which is a negative sign for this coin.
The widespread withdrawal of wallets is noteworthy, reflecting a sense of doubt and uncertainty about Litecoin. Since late November, an estimated 2.13% of Litecoin wallets have liquidated their holdings, resulting in over 9.11 million addresses with no coins.
Litecoin Faced A Higher Blockchain Activity
Despite experiencing sideways price movement, the coin maintained substantial activity. Trading volume and its MVRV ratio remained elevated, both indicators of favorable market conditions.
A noteworthy advancement occurred when BitPay, the largest cryptocurrency payment processor globally, began accepting LTC as its preferred coin. In addition to Bitcoin and Ethereum, Litecoin is acknowledged for 34% of the cryptocurrency payments processed by BitPay, which is a significant number within the payment ecosystem.
LTCUSD Technical Analysis
In the daily chart of Litecoin price, the current market pressure is bearish. After setting a top at the 115.98 level, the LTC price moved sharply down towards the 57.00 area. As the recent rebound is solid and the price holds at the 20 DMA level, we may expect a bullish continuation in the coming days.
Based on the daily structure, the ascending channel extension could take the price toward the 85.00 level, which needs a stable market above the 20-day EMA.
On the other hand, a channel breakdown with a daily candle below the 65.30 level could indicate an additional bearish opportunity in this pair. In that case, the downside momentum could extend toward the 50.00 and 40.00 areas.
