In the past 30 days, the price of Litecoin (LTC) has been on a downtrend, dropping nearly 30% since the halving. This decline has presented investors with a tempting opportunity to heavily accumulate the altcoin. But even with increased accumulation at the lower prices, Litecoin has failed to generate enough buying pressure. Consequently, a sharp decline could be imminent if the LTC falls below the support level, regardless of any continued accumulation.
Confidence among LTC holders is declining
After Litecoin’s halving in early August, the altcoin has seen alternating periods of consolidation and decline. This pattern has sparked debate over whether LTC can replicate past post-halving peaks.
According to data from Glassnode, the Hodler Net Position Change was 362,378. This metric tracks monthly position shifts among long-term investors of a given asset. A negative value indicates a mass liquidation.
Conversely, a positive Hodler Net Position Change indicates that long-term holders, or HODLers, are acquiring new positions. The chart shows that a significant amount of LTC was sold before the halving event. However, the subsequent shift to significant accumulation suggests that HODLers have renewed confidence in Litecoin’s price trajectory, potentially signaling another spike in the near term.
Interestingly, Litecoin’s OI-weighted financing rate has increased from -0.025% on August 20 to 0.004%. Positive funding rates indicate bullish sentiment, as long position traders pay short position traders to hold their contracts. However, the average balance has steadily declined, from a high of $671 on August 13 to $528 as of today.
This indicates waning traders’ confidence in holding Litecoin as there is a possibility of a significant drop if LTC fails to generate enough buying pressure to hold the crucial USD 60 support level.
What’s next for the LTC price?
Litecoin price recently attempted to break out of consolidation by rising above $66-$67; however, it was unable to hold onto these gains, indicating a strong bearish defense at that level. At the time of writing, the LTC price is trading at USD 65.03, down more than 0.7% in the past 24 hours.
The falling moving averages and the RSI struggling around the midline indicate that bears are still dominating the market. Sellers are aiming to pull the price towards the bottom of the consolidated pattern, and if successful, we could see the LTC price start testing the USD 60 support level.
A drop below $60 will trigger strong selling sentiment, which will push the price of Litecoin towards $47. Conversely, bulls are not giving up easily as they are expected to defend the USD 60 support zone and aim to push the price above the USD 50-day EMA of USD 66. If they succeed, it would imply that LTC price could continue to fluctuate within a bullish zone and move towards $76.
