What to know:
- Litecoin is trading near a major historical accumulation zone after falling about 90% from its previous peak.
- Long-term holders continue to keep a large share of LTC off the market, reducing the available trading supply.
- Analysts believe a confirmed recovery could target higher resistance levels, but support must hold first.
Litecoin has once again returned to its long-standing price level that attracts a lot of attention from the trading community. Speculations about whether the digital currency is preparing itself for an imminent recovery or decline have emerged once again.
According to the chart analysis and the on-chain data, it seems that Litecoin is approaching a stage that historically preceded major price moves.
Also Read: Strategy Bitcoin Strategy Faces Scrutiny Over $3 Billion Potential BTC Sale
Litecoin Revisits Historic Accumulation Zone
According to Crypto Patel, Litecoin is undergoing a fresh accumulation phase on its three-week chart, just like what happened from 2018 to 2020. During the 2018 to 2020 period, Litecoin took about two years forming its base, after which it surged by more than 1,622% from $24 to $400.
Based on the Chart, Litecoin has lost approximately 91% of its value since its all-time high and currently trades in the range of $30-$40. This range could potentially turn into an accumulation zone for LTC if the buyers continue to support it.
Source: X
Following the break below a long-term ascending support line, the cryptocurrency is possibly approaching the final phase of its prolonged bear market.
In case of support retention, the first level of resistance lies at $140, followed by $220 and a former high of $388. A breakout above these levels may see the price reach a target of $820.
Long-Term Holders Continue to Limit Available Supply
On-chain analysis by Omied also suggests another element that is drawing the attention of investors. While Litecoin has a substantial amount of circulating supply, much of it is immobile.
Some 44% of Litecoin hasn’t moved in a year, some 16.5% in five years, and around 11.8% (equivalent to 9 million LTC) for seven years or more. This implies that there is not much of Litecoin available for trading compared to the amount presented.
Source: X
On the other hand, payment volume in the past 30 days has been 522 million LTC, equivalent to 17.4 million LTC per day. The above figures indicate that the coins available on the market can be utilized without any problem despite their scarcity.
What Comes Next for Litecoin
Currently, there is a tendency where purchases surpass sales. Around 35% of Litecoin coins being tracked have remained unchanged for the past three months to one year, and those that have been held longer still dominate the network.
What happens next will depend on whether the buyers will be able to hold the $30-$40 support level. Maintaining this range will lead to an eventual recovery, albeit slowly, towards higher resistance levels. Failing to do so might hinder any recovery attempt going forward.
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
Also Read: India and Seychelles Strengthen Strategic Ties With UPI and Security Deal
Be the first to comment