Aaryamann Shrivastava
FXStreet
- Litecoin price is close to falling below $60, leaving it only 2.4% away from establishing new year-to-date lows.
- Litecoin whale transaction volume is averaging at $3 billion on a weekly basis, the lowest since November 2020.
- Sharing a 0.73 correlation with Bitcoin, LTC is largely dependent on BTC to drive its recovery.
Litecoin price has been, is presently and will likely continue to follow the lead of Bitcoin. But beyond the high correlation it shares with the asset, it is also vulnerable to a decline owing to the lack of action from its whale addresses.
Litecoin price nearing new lows
Litecoin price at the time of writing is trading at $61, standing about 2.4% above the current year-to-date low of $58. The cryptocurrency is likely set to fall through this level and mark a new 2023 low, potentially testing the support line at $58.
The Relative Strength Index (RSI), which indicates the momentum building up in the case of LTC, is leaning bearish and could result in further decline, given the indicator is already below the neutral line of 50.0.
LTC/USD 1-day chart
But in the event that LTC bounces off the $58 support and climbs back to reclaim the support line of $63, it would have an opportunity to breach the 50-day Exponential Moving Average (EMA), which it failed to do at the beginning of the month.
Whale activity suggests recovery might be slow
Litecoin shares a pretty strong correlation with Bitcoin. Over the past couple of weeks, this correlation has hovered around 0.73, which makes LTC’s price action vulnerable to volatility in BTC.
Litecoin correlation with Bitcoin
However, beyond the broader market cues, the lack of recovery observed in September in the case of Litecoin price is due to the declining whale activity. Even though the whale addresses (addresses conducting transactions worth more than $100,000) only control 11% of the entire circulating supply, their buying and selling still triggers the market.
Similarly, the LTC market remains liquid when these addresses conduct transactions, and likewise, the lack of it causes distress in the price action. At the time of writing, their weekly average transaction volume has hit $3.01 billion, which is the lowest since November 2020.
Litecoin whale transaction volume
This could trigger caution among investors, reducing transactions and on-chain activity, which will make recovery slower for Litecoin price.
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
Turn off Solana and win $400,000 - Solana Foundation executive announces offer
Solana has been touted as an Ethereum killer, but as with every blockchain in the crypto market, the network does not come without its fair share of issues. While many who get hacked or exploited deal with the issues after the fact, Solana intends to get a step ahead by making a very lucrative offer to white hat hackers.
Grayscale vs. SEC deadline: Commission faces a midnight Friday deadline to challenge August 29 loss
Grayscale Investments secured a resounding victory in its longstanding case against the US Securities and Exchange Commission in late August. The lawsuit started in October after the firm approached the D.C. Circuit Court pushing to have its Bitcoin Trust converted to an Exchange-traded fund.
Loom Network price hits strong weekly resistance after 32% surge as LOOM ranks high on Korea’s Upbit
Loom Network token is highly bullish, passing as a rather lucrative investment for scalping traders, buying and selling the asset within a short period to make small profits.
Voyager founder charged by CFTC for fraud and by FTC for misleading investors that lost $1 billion
Voyager was among the first crypto companies to collapse and file for bankruptcy in 2022. While the platform has been making efforts to return its customers' assets since then, it looks like the regulatory bodies are not willing to be patient.
Bitcoin: Can BTC bears challenge crypto’s 2023 bull rally?
Bitcoin (BTC) price is at a critical juncture in the weekly time frame, where bulls and bears are battling for control. However, a multi-time-frame analysis shows that BTC is bullish daily and is likely to rally higher.