Bearish Sentiment Among Litecoin Whales
Litecoin experienced a strong upward trend from mid-June to early July 2023 but also saw significant volatility due to its halving event on August 2, 2023. As part of its halving cycle, mining rewards were reduced from 12.5 LTC per block to 6.25 LTC per block. This halving event occurs every 840,000 blocks, as outlined in the Litecoin protocol. Prior halving events took place in 2015 and 2019, with the first reducing the block reward from 50 LTC to 25 LTC per block, and the second halving reducing the reward from 25 LTC to 12.5 LTC per block.
The current downturn in Litecoin’s price is largely attributed to the bearish sentiment among Litecoin whales. According to on-chain data from Santiment, large holders of Litecoin (10,000 to 10 million LTC) began selling aggressively in August, influencing retail investors to follow suit. Given the significant role that whales play in cryptocurrency markets, it wasn’t long before this selling pressure translated into a broader price decline.
U.S. Producer Prices Rise Unexpectedly in September
This Wednesday, Bitcoin, Ethereum, Litecoin, and other altcoins saw further declines against the U.S. Dollar. One factor contributing to this downturn was the surprising increase in the U.S. Producer Price Index (PPI) for September, which rose 2.2% year-on-year, exceeding the expected 1.6%. This heightened inflationary concern has strengthened the U.S. Dollar, pushing risk assets, including cryptocurrencies, lower. Additionally, speculation remains around whether the Federal Reserve will raise interest rates during its next policy meeting.
With producer prices rising due to higher energy costs, investors are now looking toward Thursday’s consumer inflation data and the start of earnings season on Friday for further clues.
In the last 24 hours, nearly $50.3 million worth of long positions across the crypto market were liquidated. As a result, the cryptocurrency market faces numerous challenges, including global economic factors and geopolitical uncertainties. With escalating tensions in the Middle East and a potential shift in global risk sentiment, the market remains fragile.
At the current price of $61.45 for Litecoin, some analysts predict further declines in the coming weeks, especially if Bitcoin continues its downtrend.
Technical Overview for Litecoin (LTC)
Since July 02, 2023, Litecoin (LTC) has experienced a 40% drop, falling from $116.05 to a low of $55.79. Currently, Litecoin’s price stands at $61.45. Technical analysis indicates that bears continue to dominate price movements. Unless Litecoin pushes above the $70 mark, there is no indication of a trend reversal, and the cryptocurrency remains in the SELL-ZONE.
Key Support & Resistance Levels for Litecoin (LTC)
Based on recent price action since February 2023, we’ve identified critical support and resistance levels. Litecoin is under pressure at the moment, but if the price moves above the $70 resistance, it could target a secondary resistance at $80.
The current support level sits at $60, and a break below this would signal a SELL, with the next target being $55. A drop below $50 would represent a crucial support level, potentially sending the price down to $40.
Factors Favoring a Potential Rise in Litecoin (LTC) Price
The cryptocurrency market is known for its volatility, and although efforts have been made to stabilize it, market fluctuations are inevitable. While Litecoin’s upward potential for the remainder of October 2023 might be limited, a break above $70 could pave the way toward $80. If Litecoin surpasses $80, bullish momentum would likely gain strength.
The overall market sentiment will play a significant role in LTC’s price direction. If investor confidence recovers, it could drive Litecoin’s price higher. The U.S. Securities and Exchange Commission (SEC) also has several key decisions coming up regarding Bitcoin ETFs, which could positively influence the broader crypto market, including Litecoin.
The SEC’s second deadline for making decisions on several Bitcoin ETF applications is October 17, which could trigger a positive market reaction if approved. This decision could lift Litecoin and other cryptocurrencies as a result.
Factors Indicating a Decline for Litecoin (LTC)
Since July 02, 2023, Litecoin has been on a steady decline, and investors are advised to take a defensive stance in the current uncertain macroeconomic environment. The bearish outlook from Litecoin whales, along with broader negative market sentiment, continues to put downward pressure on LTC’s price.
The recent U.S. inflation data, including the higher-than-expected PPI for September, has added to concerns about persistent inflationary pressures. This, coupled with a strong U.S. Dollar and the Fed’s uncertain stance on interest rates, suggests that market turbulence could persist. If Bitcoin continues its decline, Litecoin is likely to follow suit.
The current support level for Litecoin is at $60, and should the price drop below this, the next support target could be $55. Additionally, Litecoin’s price tends to be correlated with Bitcoin, so a further drop in Bitcoin below $25,000 would negatively impact LTC’s price as well.
What Do Analysts and Experts Predict?
Since July 02, 2023, Litecoin (LTC) has been in a downtrend, and many analysts suggest that the loss of interest from investors in accumulating LTC signals that the cryptocurrency will likely continue to experience low prices. The latest U.S. inflation data has further contributed to this pessimism.
Many analysts believe the Federal Reserve’s decisions on interest rates will continue to weigh heavily on the market, with expectations that the central bank could keep rates restrictive for a longer period, which is unfavorable for risk assets like cryptocurrencies.
Отказ от отговорност: Cryptocurrency investments are highly volatile and may not be suitable for everyone. Only invest money you can afford to lose. This article is for informational purposes only and should not be construed as financial advice.
