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- Litecoin’s price dropped 20% amid geopolitical tensions, with bulls defending a key $100 support zone against bearish pressure.
- Litecoin maintains strong fundamentals, averaging 200,000 daily transactions and 370,000 active addresses, highlighting its utility as a payment network.
Litecoin’s price experienced a sharp decline on Tuesday, slipping below $110, marking a dramatic 20% drop amid geopolitical tensions in the Middle East and Asia. The downturn in Litecoin (LTC) came after a stellar beginning to December when it recorded an impressive 46% gain in the first four days.
However, the broader crypto market’s steep decline over the past 48 hours has positioned Litecoin among the hardest-hit assets. On Monday, LTC was trading at $135, but it slid to $108 by Tuesday, leaving many traders caught off guard. LTC derivatives markets reveal an intense battle, with bulls rallying to establish a crucial $100 support zone, according to Coinglass.
Source: Coinglass
Bears Dominate, but Bulls Eye Strategic Rebound
As traders leverage around the $100 mark, it’s clear this level is a psychological and tactical battleground. Significant leverage at a specific price point suggests that a major breach could lead to cascading losses. To prevent this, traders with long positions may trigger covering purchases in the spot market, potentially slowing Litecoin’s correction phase.
However, the Parabolic SAR indicator at $112 suggests continued bearish momentum, while the Donchian Channels lower band points to a solid support zone at $100. Meanwhile, the RSI has crossed above 30, hinting at improving momentum, which might attract strategic buyers aiming to capitalize on a market bottom.
If Litecoin bulls manage to defend $100, they’ll aim to reclaim the next resistance at $112, with $119 being the pivotal level for initiating a recovery. On the flip side, failure to maintain this support might lead prices to slip toward $95, escalating weekly losses.
On-Chain Metrics Show Resilient User Activity
Beyond price movements, Litecoin’s robust on-chain activity offers a silver lining. According to data from IntoTheBlock, the network boasts approximately 370,000 daily active addresses. This level of engagement underscores the cryptocurrency’s ongoing utility as a payment network.
This infographic highlights some key on-chain metrics about Litecoin👇
As one of the older Layer 1 networks still seeing significant usage, Litecoin shouldn’t be overlooked.
With 370,000+ daily active addresses and 200,000+ daily transactions, it outpaces networks like… pic.twitter.com/3UZH8ulnge
— IntoTheBlock (@intotheblock) December 9, 2024
Daily transactions on Litecoin currently average 200,000, outpacing competitors like Dogecoin (DOGE) and Cardano (ADA). IntoTheBlock attributes this sustained activity to Litecoin’s cost-effective and fast transaction capabilities, making it a preferred choice for payments.
“Much of this activity stems from Litecoin being one of the few cryptocurrencies actively used for payments,” the analytics firm notes. With its unique selling points continuing to attract users, Litecoin’s network usage has even grown over the past month.
In the days to come, all eyes will be on Litecoin’s $100 support level. Whether the bulls can hold the line or bears drag prices lower, the cryptocurrency’s fundamental strength—evidenced by high user activity—remains a testament to its resilience in turbulent times.