Litecoin remained the top cryptocurrency traded on BitPay in July and has maintained its dominance throughout the year. The Litecoin derivatives market has shrunk despite recent price recovery, indicating cautious investor behavior.
In the latest BitPay report for July, Litecoin (LTC) has once again emerged as the most commonly used cryptocurrency for transactions. It’s been another month now and LTC has remained the market leader, number one all year long. This is proof that Litecoin remains the preferred digital asset for trading purposes in the cryptocurrency community.
Litecoin has been making a huge comeback, which has been especially noticeable over the past few days. The cryptocurrency fell from a high of $71 to around $50 over the past week, but has since recovered.
Over the past day, LTC has ranged between $56.60 and $58.1. Litecoin price has fallen 2% in the past 24 hours and is currently trading at $58.07. The drop extended a week-long downward trend, with the cryptocurrency suffering a 17% loss from $71.27.
Bearish sentiment in Litecoin market indicators
In addition to the price decline, market indicators for LTC are showing a more bearish trend than other cryptocurrencies. According to the data, LTC trading volume increased by 38% within a week as traders reacted to price movements. However, the overall tone remains bearish and further pressure on cryptocurrencies can only be expected.
Litecoin futures trading volume has fallen significantly from over $600 million in April to around $180 million in August. This significant drop in speculative trading activity shows that Litecoin traders are losing confidence in the cryptocurrency. Low open interest levels are usually associated with weak market sentiment and may indicate a continuation of a downtrend.
Source – Coin Glass
Litecoin funding rate is unstable. However, positive funding rates have been rising from late July to early August, indicating a certain degree of bullish mood. However, these gains may not be enough to reverse the bearish trend as the market environment remains quite negative for Litecoin.
Investigate wallet distribution and whale activity
Analyzing the distribution of wallets can reveal different behavioral trends among different categories of Litecoin holders, which may influence Litecoin’s future price. Wallets between 1,000 and 10,000 LTC are showing moderate volatility with a slight bearish trend, suggesting some consolidation among small investors.
Source: Santiment
On the other hand, wallets between 10,000 and 100,000 LTC have shown high volatility with some recent accumulation. This suggests that mid-sized holders may be buying at current lows in preparation for a future rebound.
But the most worrying trend is wallets containing 100,000 to 1,000,000 LTC. These large holders, commonly known as “whales”, have been selling a lot of Litecoin recently. This decline suggests that large investors are bearish, and the situation could get worse. As highlighted in our previous article, Litecoin reached 62 million transactions in the first seven months of this year and is expected to surpass last year’s total of 67 million transactions by the end of August.
