Litecoin Wallets Draining Fast – What’s Next For LTC Prices?

Litecoin (LTC) suffered a major fall after a week of consistent growth, posing possible difficulties going forward. According to recent data, a significant proportion of wallets have sold their Bitcoin holdings.

As of this writing, LTC is trading at $74.60, down 1.1% from its peak price over the previous day. This decline has also had an effect on LTC’s market capitalization.

With Litecoin’s market value falling by 55% compared to Bitcoin in just five months, the price chart for LTC presents a bleak image. This sharp decline in value is indicative of investors’ diminishing trust as they choose to sell off more and more of their holdings.

Litecoin Downturn: Small Investors Flee, Raising Long-Term Viability Concerns

Santiment claims that 199,000 wallets that contained Litecoin around 10 days ago are no longer in possession of the cryptocurrency. This pattern could explain why, in comparison to other prominent cryptocurrencies previously discussed, the coin has performed comparatively poorly over the last week and year.

⚡️ Approximately 199K wallets that held $LTC 10 days ago, no longer hold any coins. This is the biggest drop in wallets since October 2022. $LTC‘s market value vs. $BTC has dropped -55% in 5 months, but #FUD & small wallets dropping could turn this around. https://t.co/tIAj6ULd95 pic.twitter.com/SuhqULLfFm

— Santiment (@santimentfeed) December 7, 2023

Interestingly, small-scale holders account for the majority of the wallets that collapse, which contrasts with the tenacity exhibited by Sharks and Whales in the cryptocurrency space, according to Santiment.

It seems that small investors—who are frequently the most susceptible to market swings—are the main group selling their holdings, presumably because they are worried about the investments’ long-term sustainability and liquidity.

The significant departure of almost 199,000 wallets that previously contained LTC is a noteworthy phenomena that should not be disregarded. The significant decline in selling activity reflects a more widespread feeling of apprehension, uncertainty, and skepticism that has negatively impacted the asset.

LTC market cap currently at $5.499 billion on the daily chart: TradingView.com

Up to 2.13% of all Litecoin wallets have sold off their LTC since late November, according to the most recent data. On the Litecoin network, at least 9.11 million addresses now hold zero coins.

As some of the top cryptocurrencies have experienced incredible price increases—gaining over 100% in the year thus far—Litecoin has remained relatively stable, showing a growth of less than 4% year to date.

For about two weeks, the price of LTC has been consistently fluctuating between $70 and $75. In the second half of the month, there was a narrow trading range between $68 and $72.

LTC’s Resilience: Navigating Liquidation In Leveraged Trading

In order to forcefully end a trader’s leveraged position once a trader loses all or a portion of their initial margin, the exchange uses a process known as liquidation. It occurs when a trader doesn’t have enough money to maintain an open position in a leveraged position, or can’t meet the margin requirements for the position.

Source: Bitpay

LTC maintained a high trading volume even as its price went sideways. Additionally, its MVRV ratio was higher, which is often an indication of good health.

However, even with a decline, its Relative Strength Index (RSI) stayed over the neutral threshold of 50. By doing this, the coin may be able to satisfy investors and continue its bull run.

Meanwhile, the biggest crypto payment processor in the world, BitPay, now accepts LTC as its preferred coin. Beyond Bitcoin [BTC] and Ethereum [ETH], it has demonstrated its supremacy in practical applications, accounting for 34% of BitPay’s payment count in cryptocurrency.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

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