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What Traders Should Know About the Litecoin (LTC) Price Capping Risks

What Traders Should Know About the Litecoin (LTC) Price Capping Risks

After the altcoin opened the week at a low, “Litecoin” investors have reason to be concerned about their holdings in light of last week’s bearish markets. Even though LTC saw a brief increase, its near-term prospects were still uncertain.

Due to the recent price drop, Litecoin has been re-testing the ascending support level it broke through a week ago. A section of the token’s price channel over the past eight weeks is shown in the second. In addition, the alternative has repeatedly tried to use that support and failed. And the most recent retest offers only a few, shaky clues.

During the sessions on August 19, Litecoin tested the depths of its decline by trading below its support level. Since then, the token’s price has stayed roughly the same. The price has given up a lot of its ability to sustain itself above this level.

Does Flimsy Backing Hint at What’s to Come?

At the time of publication, LTC was trading at $55, indicating that investors are nervous about the upcoming change. Addresses holding more than a million coins have, for example, kept their balances stable over the past 24 hours. It’s further evidence that they’re waiting for the next market move before carrying out any executions.

However, over the past two days, there has been a net outflow from addresses holding 1,000 LTCs to 100,000 LTCs. The same group of people moved quickly to gather near the most recent bottom, then started cashing out their gains. Although Litecoin has not yet recovered from the support level, there has been a significant increase in on-chain volume since August 21.

That may indicate a large accumulation of retail investors near the support level. However, the retail sector has the smallest impact on physical location. That’s why the token’s potential upside is so limited. The liquidity they provide helps short-term traders get out of the market.

Some new investors may have been able to get in at the support level. That would explain the recent uptick in both the number of unique and active addresses that has occurred over the course of just two days. The volume drop is reflected in the addresses, which show that retail buyers with spending limits accounted for the majority of transactions. Instead, the existing selling strength at the current value areas nullified their buying pressure.

Investors in LTC should proceed with caution in light of the cryptocurrency’s recent struggles around its support floor and the relative inactivity of the industry’s biggest whales. Contingent on a number of factors, the market could move up or down. The bulls need to make sure the price of rice recovers so that the bears won’t keep suppressing it. The fog may need to lift before people show any interest.

Orizu Augustine
Orizu Augustine is an experienced crypto writer working for Alltechcraft. Having passion for writing, he covers news articles from blockchain to cryptocurrency and iPhone and Samsung related articles.