Litecoin [LTC] has faced multiple rejections that left the coin to suffer a year-long downtrend. It is no doubt that the general consensus has been that Litecoin often leads the way for altcoin trends. But is it read? Let’s look at some crucial data points.
Litecoin was up by almost 60% since the beginning of this month. Despite being heralded as an alt season leader, the crypto was left behind this years’ short-lived altcoin season. And despite its “big brother”, Bitcoin eyeing to establish a new peak, the alts’ race for the same appeared to have halted.
Litecoin Eyes Crucial $90-$100 Range
One of the most concerning signs for Litecoin is the number of daily active addresses on the network. This trend was noted to be declining in tandem with the latest upside price action of the coin. However, on the contrary, Litecoin addresses holding 1,000,000 to 10,000,000 coins have been on a gradual incline since the last week of October. This essentially meant that the whales were in anticipation of a price rise in the coming days and were not in the mood to offload their bags just yet.
The $90-$100 range is an important resistance area for the coin. A spike in daily active addresses in this region may suggest profit-taking for retail investors as well as larger LTC holders. But this point could also bring in high sell pressure in the market.
The crypto-analytic platform, Santiment observed a significant spike formed in LTC’s Token Age Consumed. The metric, essentially suggests the number of tokens/coins changing addresses on a particular date, multiplied by the days since it last moved. More specifically, Token Age Consumed provides data on the movement of otherwise dormant coins.
In the case of Litecoin, a spike forming a local top meant that a significant amount of previously dormant tokens were moved either between exchanges or wallets. Historically, such spikes have been preceded by a local bottom.
It is important to note that LTC’s local bottom has not formed yet. Rather, it has maintained a consistent upward trajectory since the second week of November. Hence, the movement of the dormant coins can be looked at as a bearish sign for the coin.
The much-anticipated bullish outlook for the altcoin market could be potentially invalidated if Litecoin extends the bearish leg farther down. A move such as this is likely to call for more sell orders, in turn, forcing LTC towards previously breached support points.