Litecoin, a peer-to-peer cryptocurrency, remains in a consolidation phase as open interest in the futures market remains weak and whale activity has increased.
LTC whale activity increases
Litecoin (LTC), developed by former Google engineer Charlie Lee, is trading at $64 and has remained there for the past two weeks. This price is about 27% above the August low and is down 44% from this year’s high.
This price movement correlates with Bitcoin (BTC), which soared to an all-time high of $73,800 in March, but fell to $49,000 in August, trading at $54,000. It had been.
According to Santiment, Litecoin has seen a significant increase in whale buying activity over the past few weeks, a sign that some whales are buying on the spur of the moment. Santiment also observed a significant increase in the number of social media mentions.
⚡️ Litecoin has been experiencing consistently higher than normal levels of whale activity since late August. In addition to this, there has been a great deal of discussion regarding the OG asset, which ranks 19th in market capitalization. Whether you’re a fan of LTC or not, this is worth noting. pic.twitter.com/qmxUu2dxBI
— Santiment (@santimentfeed) September 7, 2024
However, further data from Santiment shows that daily active addresses have fallen sharply over the past few months.
Litecoin has over 327,000 active addresses as of Friday, September 6, down from 801,000 in June.
Litecoin daily active addresses | Source: Santiment
Another big issue is that Litecoin futures open interest has been suppressed over the past few months. Interest in the futures market on Saturday exceeded $243 million. That’s down from a year-to-date high of more than $708 million on Sept. 7.
Futures open interest is an important indicator in financial markets because it represents the open contracts that have not yet been filled. In most cases, high open interest indicates increasing demand for the coin among investors.
Meanwhile, Litecoin’s funding rate has retreated to 0.0016% from 0.078% earlier this week. A positive funding rate means that the holder pays a fee to the short position holder. Funding interest rates are approaching negative territory, and there is a risk that they will continue to fall.
Litecoin below this major resistance level
Litecoin price chart |Source: TradingView
Technically, there are signs that Litecoin is breaking below the downtrend line that connects it to its highest price range since May 20th. The 50-day moving average also remains below, suggesting further downside.
If this happens, Litecoin, one of the largest proof-to-work coins, could fall to the next key support level at $60, the January 3rd low.
A break below this support level will result in a fall to the next key support, the August low of $50. However, a move above the downtrend line supported by volume would signal further upside.
