Despite Litecoin’s price going through a strong period and increased activity from large holders, often referred to as whales, open interest in the futures market remains low.
The coin is currently trading around $61 and has remained at that level for the past two weeks. The price has recovered 27% from August lows, but remains 44% below this year’s high.
Litecoin: Whales are increasing as active users are decreasing
At the time of writing, LTC price is up just 1% to $60,73, with trading volume surging 4.81% from yesterday. Moreover, recent Litecoin price predictions indicate that the cryptocurrency could reach $70,97 by the end of the year. This price movement mirrors Bitcoin, which soared to an all-time high of $73,800 in March before falling to $49,000 in August. Bitcoin is currently trading around $54,000.
According to data from Santiment, there has been a noticeable increase in whale purchases of this popular altcoin in recent weeks, suggesting that large investors are taking advantage of the drop in price. Additionally, the platform has reported a spike in mentions of Litecoin on social media, indicating growing interest in the asset.
Credit: X.com
Additional data from Santiment shows that the altcoin has seen a significant drop in daily active addresses in recent months. On Friday, September 6th, LTC recorded over 327,000 active addresses, which was a significant decrease from the 801,000 active addresses observed in June.
Litecoin futures market shrinks, signs of demand decline
Another significant concern about this cryptocurrency is that futures market activity has been suppressed. As of Saturday, September 7, the company’s futures open interest was just over $243 million, down significantly from its year-to-date peak of just over $708 million.
Open interest in futures is an important indicator in financial markets because it reflects the total number of outstanding contracts that have not yet been settled. Generally, high open interest indicates a high demand for the cryptocurrency among investors.
Additionally, LTC’s funding rate declined significantly, to just 0.0016% from 0.078% at the beginning of the week. A positive funding rate typically means that long position holders are paying fees to short position holders. Current near-negative interest rates pose a risk of further decline, suggesting that demand for holding long positions in LTC futures may decline.
Litecoin faces downward pressure, key support level is $50
Technically, the coin remains below the downtrend line connecting its highest price movement since May 20th, showing bearish signs. It is also trading below its 50-day moving average, suggesting further declines are possible.
If this downward trend continues, LTC, one of the largest proof-of-work cryptocurrencies, could fall to the next key support level below its January 3rd low of $60. There is. If we break below this support, the next important support level to watch is the August low of $50. Conversely, a volume-supported rally above the downtrend line could indicate the potential for larger profits.
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Teuta
Teuta is a veteran writer and editor with over 15 years of experience in the macroeconomics, technology, cryptocurrency and blockchain industries. He started his career in 2005 as a lifestyle writer for Cosmopolitan magazine in Croatia and went on to cover business and economics for prestigious publications such as Forbes and Bloomberg. Influenced by figures like Don Tapscott and Bruce Dickinson, Teuta embraced the blockchain revolution, believing that cryptocurrencies are one of humanity’s most important inventions. Her fintech efforts began in 2014 and focused on cryptocurrencies, blockchain, NFTs, and Web3. Known for his excellent teamwork and communication skills, Teuta holds a double master’s degree in political science and law, loves punk rock and Chablis, and has a passion for shoes.
Disclaimer: The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.
