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- Litecoin’s price faces downward pressure due to a persistent trend of lower highs, indicating potential correction.
- Bitcoin’s market outlook heavily influences Litecoin’s trajectory, with a possible downturn looming if Bitcoin undergoes correction.
Litecoin (LTC) has been grappling with a downtrend characterized by a series of lower highs since its 69% crash between November 2021 and February 2022. Despite a slowdown in selling pressure, LTC has failed to break free from the grip of this descending trend line. The current retest has cleared the $100 hurdle but has yet to breach the overarching trend line resistance.
The course of the Bitcoin market appears to be influencing the future of Litecoin’s pricing. LTC’s attempt to retest the declining trend line may cause a similar negative movement if Bitcoin transitions from a sideways to a corrective movement. A breakdown of the key $100 level, which may trigger a fall into the $90 support level and represent a nearly 13% decline, is what investors are bracing for.
Despite the looming correction, investors eye a silver lining. In particular, if Bitcoin’s outlook improves, a $90 support level recovery may offer a favorable time to purchase. LTC might reach $119 in such a situation due to Litecoin’s comeback rally. Litecoin’s recovery rally might propel LTC toward $119 in such a scenario. In a more bullish scenario, LTC could aim for a retest of the $150 or even the $200 levels, albeit with a potentially prolonged timeline.
While the short-term outlook for Litecoin remains cautiously optimistic for long-term holders, the pivotal role of Bitcoin cannot be overlooked. A steeper correction in Bitcoin’s price could spell trouble for Litecoin, potentially causing it to breach the $90 support level and plummet further to the next key support level at $75, marking a 16% decline.
Miners Drive Momentum with Accumulation
Litecoin (LTC) has seen a remarkable surge in its price, reaching an eight-month peak of $106.2 on March 29th. This surge comes amidst significant activity observed among miners and speculative traders, hinting at further gains shortly.
In March 2024, Litecoin miners played a pivotal role in driving the ongoing rally. According to on-chain data trends, miners have accumulated approximately 150,000 LTC coins, increasing their balances from just over 2 million LTC in February to 2.2 million LTC by the end of March. This accumulation, valued at around $16 million at current prices, has significantly reduced the supply of LTC entering the market. With miners showing confidence in LTC’s near-term prospects, the trend indicates a bullish sentiment among key stakeholders.
Litecoin (LTC) price vs. Miners reserves | March 2024 | Source: IntoTheBlock
Speculative Traders Fuel Optimism
In addition to miners, speculative traders have contributed to the positive momentum surrounding Litecoin. Coinalayze’s open interest chart reveals a surge in derivatives contracts, with open interest growing from $337 million to $481 million on March 29th. This substantial increase of $144 million in fresh capital inflows indicates growing optimism among traders. Notably, the growth in open interest has outpaced the 12% price surge witnessed on the same day, suggesting a strong belief among market participants in the sustainability of the upward trend.
While the recent surge in LTC prices is promising, there are potential challenges ahead. A looming sell-wall at the $130 range, as indicated by IntoTheBlock’s global in/out of money around price data, presents a hurdle for further price advancement. Additionally, bears could regain control if the LTC price reverses below $90. However, with speculative traders continuing to pour in fresh capital, the likelihood of a significant downturn in the near term seems minimal.