Journalist
Posted:
- LTC could rise much higher than $72 in the coming days.
- Long-term holders have been hesitant to liquidate their LTC positions.
Litecoin [LTC] is one of the top altcoins experiencing intense negative sentiment, according to Santiment data. AMBCrypto checked the crypto analysis tool and found that the coin’s weighted sentiment had dropped to -2.415.
Weighted Sentiment measures the unique social volume related to the market’s perception of a project.
Thus the decline in metric implies that the broader market was not positive about LTC. It may seem like the market is right to lower its expectations for LTC.
Source: Santiment
This is because the coin has been consolidating between $70 and $73 in recent days.
While the sentiment tends towards fear, uncertainty and doubt [FUD], it could also be the catalyst that sparks a revival for LTC. This is because historically, extremely negative sentiment is a sign of a bullish recovery.
In an interesting twist, Litecoin’s bullish characteristic was not only reflected in its short-term projection, but a striking sign was also shown by the Liveliness.
Vibrancy decreases as long-term holders accumulate to HODL. HODL is an acronym for Hold On to Dear Life and involves investors purchasing tokens to hold for a long period of time.
If vibrancy diminishes, it means long-term holders are liquidating their positions. At the time of writing, Litecoin’s vibrancy was 0.70, indicating that accumulation was more prevalent than distribution.
Source: Glassnode
AMBCrypto also controlled the technical part of LTC if accumulation exceeded distribution.
According to the Accumulation/Distribution (A/D) indicator, there were more buy orders than sell orders for the coin. This implies that LTC has the potential to rise much above $72 in the short term.
The 4-hour LTC/USD chart also took into account the Relative Strength Index (RSI).
At the time of writing, the RSI was 56.55. This was a sign that LTC had exited its overbought status and could move south. Should buying pressure for the coin increase, a move towards $80 could now be voided.
Source: TradingView
Another metric to consider is the funding rate. Funding rates represent the difference between the spot price of a cryptocurrency and the perpetual futures market price.
If the funding rate is positive, it means traders are optimistic about the price action. On the other hand, a negative financing rate indicates bearish sentiment.
At the time of writing, LTC’s financing rate was 0.023%. This lecture suggests that there are more bullish positions open in the market than shorts.
The recovery prospect was also supported by social dominance. With social dominance, the discussion around an asset is compared to that of others in the top 100.
Source: Santiment
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Litecoins’ social dominance had dropped to 0.515% at the time of writing. This implies that there was not much hype surrounding the coin.
In terms of price action, this means LTC was nowhere near its local top. The chance of an upward trend is therefore high.
