Litecoin is up 9.5% over the past week, defying broader crypto market weakness. Technical analysis indicates that a breakout of $100 is possible, supported by the uptrend in open interest and SOPR.
Litecoin (LTC) is one of the top cryptocurrencies by market capitalization, but it has bucked the overall bearish trend seen across the crypto market in recent weeks.
While many major assets have taken a severe hit and are down at least 5% or more, Litecoin has managed to hold its ground and even record gains.
Over the past two weeks, Litecoin is up 3.5%, and in the last week alone, the asset is up 9.5%.
However, there has been a slight retracement over the past 24 hours, with LTC currently down 0.5% and trading at $65.88 at the time of writing.
Is Litecoin ready for further growth?
This bullish price action for LTC caught the attention of traders and analysts. One such prominent crypto analyst, ZAYK Charts, shared his technical outlook on Litecoin on X (formerly Twitter).
According to ZAYK Charts, Litecoin is trading within a descending channel formation on the 1-day chart, which could hint at a possible breakout on the horizon.
Source: ZAYK Chart/X
For context, a descending channel formation in trading is a technical pattern that occurs when the price of an asset moves within a downward parallel trendline.
This formation indicates that while the price is trending down, a breakout is possible when the price reaches the lower limit of the channel.
A breakout occurs when the price crosses the upper limit of the channel, indicating the end of a downtrend and a possible reversal to the upside.
If Litecoin can break out of this downward channel, the asset’s next target could reach $100, according to ZAYK Charts.
This prediction is based on previous technical patterns observed in the market.
However, this breakout will primarily depend on market momentum and whether Litecoin can gather enough bullish support to break through its resistance levels.
Basic concept of LTC
There has been an interesting movement in Litecoin fundamentals to support this potential breakout.
According to data from Coinglass, Litecoin’s open interest is on the rise, increasing by 1% to a current valuation of $243.96 million.
Source: Coin Glass
Open interest refers to the total number of outstanding derivative contracts (such as futures and options) that have not been settled.
The increase in open interest suggests that more traders are taking positions in Litecoin, which could indicate increased interest and confidence in a potential price spike.
Another important metric to monitor for Litecoin is the Used Production Return (SOPR), which measures whether holders are selling their assets at a profit or a loss.
A SOPR value of 1.0 indicates that the coin is selling at its original purchase price, while a value above 1.0 means the holder is selling at a profit, and a value below 1.0 means the holder is selling at a loss. Indicates that it is for sale.
According to Glassnode data, Litecoin’s SOPR has shown a slight recovery recently. After dipping below 1.0 early last month, the indicator is now back at 1.0.
Source: Glassnode
Read Litecoin (LTC) price prediction for 2024-2025
This indicates that, on average, LTC holders are breaking even on sales, which may suggest that the market is stabilizing.
A rise in SOPR could be a positive sign for LTC prices as it could indicate that selling pressure is easing and buyers are gaining confidence.
Previous: Cardano plummets after Chang hard fork: How quickly can ADA recover?Next: AAVE price soars 10% after massive drop: What’s happening now?
Source link
