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Previously known as Bitcoin’s silver alternative to gold, Litecoin has seen better days. Since its peak on April 1st, the market value of cryptocurrencies has fallen by 36%, showing a steady decline. Both traders and investors are concerned about this sharp decline, with many wondering if this aging crypto asset is nearing the end of its lifespan.
The liquidation of 45,000 wallets worth approximately 0.1 to 1 LTC is one of the most worrying signs. The fact that many of these small wallets, typically owned by retail traders and the minnows of the cryptocurrency world, are collapsing suggests that people are losing hope in Litecoin. This type of withdrawal typically indicates panic selling when impatient investors abandon ship due to the possibility of additional losses.
⚡️ Litecoin has not set social forums on fire, with its market value down -36% since its peak on April 1st. The sudden liquidation of 45.2K net 0.1-1 LTC wallets shows that small traders are finally capitulating from OG crypto assets. Impatient little fish… pic.twitter.com/qiZ9B72eG6
— Santiment (@santimentfeed) August 27, 2024
However, history has shown that such selling can also be a contrarian signal and often marks the bottom of a market cycle. The current technical situation of Litecoin is not at all promising. Currently trading at around $63, the asset is well below a key moving average that is acting as resistance rather than support.
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Litecoin would need to recover to the $70 level to even consider a bullish reversal, especially since the 200-day moving average is significantly above the current price. Litecoin is not yet in oversold territory, but it is also not attracting buying interest, as evidenced by the Relative Strength Index (RSI), which is currently circling around 44.
There has been no noticeable spike in transaction volume, which would indicate a large influx of new buyers, and the overall trend has been sluggish. Although current market data shows a dire situation, things can always turn positive. It’s not clear what triggers it.
