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Is Litecoin ‘dead?’ 50% hike in 30 days may not be enough because…
Speculative activity around Litecoin has dropped after hitting a multi-month peak earlier this month, raising questions about the cryptocurrency’s future prospects. Despite the recent gains, analysts are skeptical that the rally can sustain itself due to various bearish signs emerging on the charts.
Litecoin’s price surged by over 50% in the past 30 days, mirroring the widespread gains across the altcoin market. However, this significant gain may not be enough to save Litecoin from its impending doom. According to popular analyst Ali Martinez, LTC is now trading at the same price as it was back in 2017, indicating a lack of growth. Furthermore, he argued that the cryptocurrency lacks strong fundamentals to drive long-term growth.
On the contrary, the surge in Litecoin’s profitability has led to an increase in wallet activity. According to IntoTheBlock data, an unprecedented 78% of Litecoin holders are now profitable, surpassing its 2021 levels. This could potentially lead to increased market confidence and a bullish outlook for LTC.
However, despite this rally, Litecoin’s price action is not without bearish signs. A recent inverse cup and handle pattern has emerged on the four-hour chart, which could indicate a reversal of the current trend. If the price reverses itself, traders should be wary of the neckline at $100.65 as it could trigger further losses.
In addition to this bearish sign, Litecoin’s Chaikin Money Flow (CMF) has weakened, suggesting a decline in buying pressure. The CMF has dropped to the zero line, indicating that momentum is dwindling and potentially signaling a surge in selling activity. This would be reinforced by a negative flip of the metric.
Meanwhile, the Moving Average Convergence Divergence’s (MACD) histogram bars also indicate weak buying pressure. While the MACD line on the lower timeframe remains positive, it is now indicating reduced momentum, casting doubt over the rally’s sustainability.
Finally, data from Coinglass reveals a significant drop in speculative activity around Litecoin, with Open Interest (OI) falling to $531 million from its multi-month peak of $706 million earlier this month. This decline could be interpreted as bearish sentiment due to decreased market participation and indecision among traders.
In conclusion, despite the recent 50% gain, Litecoin’s current price action is concerning. The emergence of bearish signs on the charts, combined with a drop in speculative activity, suggests that the rally may not be sustainable. As such, it can be inferred that Litecoin’s future prospects are uncertain and could potentially signal its impending demise.
Source: ambcrypto.com
