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Litecoin price remains sandwiched within the $81 – $83 narrow channel since the start of May 2024, despite bullish momentum returning to the crypto market this week. Critical on-chain metrics are flashing early signs of an imminent LTC breakout.
LTC Price Action Falls Behind Market Trend
Since the start of May 2024, Litecoin price continued to move sideways, as the bulls struggle to flip the $86 resistance cluster. Despite the bullish tailwinds from the cooler-than-expected inflation reported in the latest US CPI data, LTC price has failed to attract investors interest this week.
Consequently, LTC price action has now fallen far behind the broader crypto market average.
As seen above, LTC opened trading on May 1 at around $79.50. However, at the time of writing on May 16, Litecoin’s price reached $83, reflecting only a 4% upswing for the month.
However, Litecoin appears to be underperforming by a large margin. Compared to LTC’s 4% bounce, the TOTAL Cap chart, which captures the real-time growth in the cumulative market capitalization of all listed crypto assets, has increased by 15.1%.
Whales Invest $80 Million to Front-run LTC Breakout
Litecoin’s underwhelming sideways price performance in the first half of May 2024 has been well-documented. However, recent on-chain data trends show crypto whale investors have been making large volume LTC purchases this week, likely to front-run a potential price breakout.
The Santiment chart below tracks real-time swings in LTC balances controlled by whale wallets holding a minimum of 10,000 LTC (~$800,000).
Looking at the chart above, the Litecoin whales held a total balance of 47.91 million LTC as of May 8. However, a week later, that figure increased significantly to reach 48 million LTC at the time of publication on May 16.
Valued at the current price, the Litecon whales have effectively spent over $80 million acquiring 90,000 LTC between May 8 and May 16.
When whales make such large purchases during periods of flat price action, as observed above, it suggests they may be looking to front-run an imminent breakout.
LTC Price Forecast: $86 Resistance Looms Large
Drawing insights from the whale’s $80 million fresh purchases in the past week, Litecoin price could be setting up for a major breakout towards $100 in the days ahead.
However, derivatives market indicators show that LTC bulls face a looming brick-wall around the $86 territory. Coinglass’ Liquidation heatmap data below shows that bear traders stand to lose over $5.8 million on leveraged SHORT contracts if Litecoin price moves above $85.9.
To avoid booking such large losses, many Short traders could look to cut-down on their positions or deploy stop-loss triggers as price move towards $85.9. This inadvertent surge in sell-pressure could put downward pressure on LTC in the near-term.
But if the short traders move to hedge their positions with LONG spot purchases, Litecoin price stands a healthy chance of fipping the $85.9 resistance has heading toward $100 as predicted.
In the event of a market correction, bulls could mount a short-term support cluster around the $79 level to avoid losing over $5 million to LONG contract liquidations.