- Litecoin breaks and closes below an ascending trendline, signaling a change in market structure.
- On-chain metrics paint a bearish picture, as LTC’s dormant wallets are active, and the NPL indicator shows a negative spike.
- A daily candlestick close above $71.25 would invalidate the bearish thesis.
Litecoin (LTC) trades slightly down at around $66.60 on Monday after closing below an ascending trendline on Sunday. Technical indicators suggest a potential downturn, supported by on-chain metrics showing dormant wallets becoming active and a negative spike in the Network Realized Profit/Loss (NPL) indicator pointing to a decline ahead.
Litecoin set for a down leg after closing below an upward trendline
Litecoin price broke and closed below an ascending trendline (drawn by joining multiple lows since early August) on Sunday after facing rejection and closing below the 200-day Exponential Moving Average (EMA) at $70.63 earlier in the week. As of Monday, LTC’s price continues to trade down around $66.60.
If the ascending trendline breakdown level around $68 holds as resistance, LTC could decline over 11% from its current level to retest its August 27 low of $59.
The Relative Strength Index (RSI) on the daily chart points downwards and reads at 43, below its neutral level of 50, indicating increasing bearish momentum.
LTC/USDT daily chart
Santiment’s Age Consumed index aligns with the bearish outlook noted from the technical perspective. Spikes in this index suggest dormant tokens (tokens stored in wallets for a long time) are in motion, and they can be used to spot short-term local tops or bottoms.
For LTC, history shows that the spikes were followed by a decline in Litecoin price. The most recent uptick on Saturday also forecasted that LTC was ready for a downtrend.
LTC Age Consumed chart. Source: Santiment
Santiment’s Network Realized Profit/Loss (NPL) indicator also projects a bearish outlook. This metric shows daily network-level Return On Investment (ROI) based on the coin’s on-chain transaction volume. Strong spikes in a coin’s NPL indicate that its holders are, on average, selling their bags at a significant profit. On the other hand, strong dips imply that the coin’s holders are, on average, realizing losses, suggesting panic sell-offs and investor capitulation.
In LTC’s case, the NPL indicator dipped from -649,360 to -65.54 million from Friday to Saturday.This negative downtick indicates that the holders were, on average, realizing losses and increasing the selling pressure.
LTC Network Realized Profit/Loss chart. Source: Santiment
However, if LTC recovers the 200-day EMA at $70.63 and closes above Saturday’s high of $71.25, the bearish thesis would be invalidated. This scenario would cause the Litecoin price to rise 7% to retest its October 19 high of $76.19.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Crypto Today: Cardano, XLM, FLOKI lead $3.1 trillion rally, Russia bans crypto mining, Bitcoin eyes $95K
Cardano (ADA) price action ADA’s ongoing rally has been attributed to rumors that the Trump administration could collaborate with the Cardano network to build a blockchain voting system.
Trump administration allegedly seeks to create new crypto position in White House
President-elect Donald Trump and his team are reportedly seeking to introduce a new White House position for crypto policy, Bloomberg reported on Wednesday.
Solana Price Forecast: Traders move 6.7B SOL as bulls target all-time highs
Solana price has succumbed to a 7% dip after rejecting the $250 resistance on Monday. Negative shifts in vital trading indicators suggest bears could delay the all-time high breakout target.
FLOKI to go live on Coinbase few days after the exchange listed PEPE and WIF
Floki Inu (FLOKI) is down 5% on Wednesday following crypto exchange Coinbase's announcement that the token will begin trading on its platform over the next 24 hours.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.