The market witnessed a comeback in volatility this week, with Bitcoin (BTC) crossing the $37,000 mark. Yet many prominent altcoins did not fully benefit from this upturn. Of this, Litecoin (LTC) remains a notable example, hovering around the $70 level despite an improvement in on-chain metrics. Nevertheless, with waning interest from whales, Litecoin faces the risk of a downturn if it fails to meet buyer demand.
Litecoin loses support from whales
Over the past day, the value of Litecoin (LTC) has seen significant fluctuations. Initially, it faced resistance around $72, leading to a sharp decline. The upcoming Federal Open Market Committee (FOMC) meeting has fueled bearish sentiment around LTC, especially after the loss of support from the whales.
According to Coinglass, there was a prolonged liquidation of more than $1.3 million, indicating that the market movement was not in favor of those expecting a price increase. Additionally, the cryptocurrency market faced a downturn following announcements of upcoming enforcement actions by the Department of Justice (DOJ) against the crypto sector, scheduled for 3:00 PM Eastern Time today. This development has helped push Litecoin’s price into a bearish zone.
Data from IntoTheBlock indicates a recent decline in whale transactions, with the value falling from $1.89 billion to $1.54 billion in recent days, although a small recovery was noted today. Interestingly, a majority of Litecoin holders are currently experiencing losses, with around 64% of them in the red. In contrast, only 30% of holders, representing approximately 2.8 million addresses, are making a profit, while 6% are at a break-even point and experiencing no profit or loss.
These increasing loss-making addresses could lead to impatience among these holders, especially if the price of LTC starts to rise. Consequently, an upward price movement could lead to more selling activity as these holders try to minimize their losses.
What’s next for LTC pricing?
Litecoin recently fell below the EMA trend lines as buyers lost momentum at $72. However, the downside momentum did not continue to the next support level as buyers aggressively bought near the low of $67. At the time of writing, the LTC price is trading at $69.4, down more than 1.2% from yesterday’s price.
Currently, LTC is trading within a consolidated zone as it has not generated significant volatility in recent weeks. An attempt by buyers to hold the price above $77 could signal the start of a relief rally, potentially leading to the LTC price rising towards $85. However, this level could see significant bearish dominance.
A bearish move is expected if there is a decline below $65. If buyers fail to generate buying demand near this level, LTC prices could fall sharply, potentially targeting monthly support lines. In such a situation, Litecoin price could retest its strong support at $57; however, this level will likely be defended by buyers.