Confidence among long-term holders of Litecoin has increased in recent months. Indicators suggest that LTC is overvalued and indicate a price correction.
Litecoin (LTC) was able to trade above important levels as the market turned bullish. Could this development allow LTC to begin its journey towards $100? Let’s take a closer look at the coin’s status to see if that is possible.
Litecoin trades above major levels
Litecoin bulls were having a good time in the market as the price of Litecoin rose over 3% last week. The bullish trend continued over the past 24 hours as the coin increased in value by another 3%.
As of this writing, LTC is trading at $65.58, making it the 19th largest cryptocurrency with a market capitalization of over $4.9 billion.
According to IntoTheBlock, only 22% of Litecoin investors made a profit despite the price increase. However, the trend could change as the coin was able to test an important support level.
Popular cryptocurrency analyst Crypto Tony recently posted a tweet revealing that LTC’s successful support test could lead to a price rebound. In fact, a rebound in price could send LTC towards the $100 resistance in the coming days and weeks.
Source:X
Glassnode data points to a similar possibility. According to the Pi Cycle Top indicator, the LTC market high could be around $148. This suggests that it is not far to expect LTC to rally towards $100 in the coming days.
Source: Glassnode
Is LTC ready for a breakout?
AMBCrypto’s analysis found that long-term holders (investors who have held LTC for more than a year) have increased their confidence in the coin over the past few months as the graph increases.
To be precise, over 78% of LTC holders were long-term investors.
Source: Into the Block
Analysis of Santiment’s data revealed a significant increase in LTC’s MVRV ratio. Moreover, its weighted sentiment followed a similar route, meaning that bullish sentiment around the coin was predominant in the market.
However, not all seemed well.
Source: Santiment
For example, Litecoin has slowed down. This means that LTC is used less frequently for transactions within a set time period. Furthermore, the NVT ratio also recorded an increase.
Every time this indicator rises, it indicates that the asset is overvalued and suggests a price correction.
Source: Glassnode
Is your portfolio green? Check out the LTC Profit Calculator
Therefore, AMBCrypto checked the daily chart of Litecoin to better understand which way Litecoin is heading. Our analysis shows that Chaikin Money Flow (CMF) recorded a sharp decline, indicating a price correction soon.
However, as the Money Flow Index (MFI) rose, it turned in favor of buyers, raising expectations that prices would continue to rise.
Source: TradingView
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