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Litecoin (LTC) Battles $80: A Critical Test for Its Market Stability

2 mins
Updated by Ryan James
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In Brief

  • Most Litecoin spent volume comes from holders who’ve kept their LTC for less than three month, leading to high market volatility.
  • A notable spike in selling from 1-3 month holders on May 10th led to a decline in LTC price.
  • The current price of LTC is below the Ichimoku cloud, suggesting a bearish trend and potential further downside.
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In today’s analysis, we will examine Litecoin’s (LTC) recent price action and its on-chain activity to understand the underlying trends and potential future mid-term movements.

Bitcoin’s struggles to break the $61K price level have put pressure on LTC, leading it to trade below the critical $80 support level. What’s driving this behavior? Let’s examine the details.

LTC is Trading Just Above a Critical Support Level

In the chart below, we observe Litecoin’s price action in the 4-hour timeframe. The red lines highlight key support and resistance levels. Currently, the price is around $79. A decline below the $75 range could trigger a cascade of liquidations, leading to further price depreciation.

LTC/USDT 4H Chart & Ichimoku Cloud: TradingView
LTC/USDT 4H Chart & Ichimoku Cloud: TradingView

The $80.37 level, near the $80 mark, aligns with the 0.618 Fibonacci retracement level and is crucial mid-term support. 

Litecoin’s price recently attempted to break below the 4-hour Ichimoku Cloud. If the price closes below the cloud, this could trigger increased volatility and lead to a continued mid-term price correction to $75.

Read More: Litecoin (LTC) Price Prediction 2024/2025/2030

If the price refuses to break above the cloud, it could signal a potential trend reversal.

The provided charts show spent outputs segmented by age bands. The green bars represent LTC held for 1 hour to 24 hours before being spent, blue bars indicate LTC held for 1 day to 1 week before being spent, light green bars show LTC held for 1 week to 1 month before being spent, and red bars reflect LTC held for 1 month to 3 months before being spent. The black line represents the LTC price in USD.

LTC Spent Volume by Age Bands: Glassnode
LTC Spent Volume by Age Bands: Glassnode

The most volume is spent within 1 hour to 24 hours (on average, 800K LTC is spent per day), indicating a lot of short-term trading activities. This rapid trading activity can make the price more volatile.

Read More: How To Buy Litecoin (LTC) and Everything You Need To Know

On May 10, there was a significant sell-off by mid-term holders, those holding LTC for 1 to 3 months. This might indicate a change in sentiment or profit-taking behavior. Such spikes can lead to mid-term price drops.

LTC Spent Volume by Age Bands: Glassnode
LTC Spent Volume by Age Bands: Glassnode

Strategic Decision-Making and Outlook for Litecoin

  • Bearish to Neutral Outlook: LTC’s price struggles below the $80 support level, showing weakness after Bitcoin’s challenges at the $61,000 mark. This has led to fear among holders, with short-term investors exiting to cut losses.
  • Conditional Support: Should Bitcoin fall below 61,000, LTC might experience a notable mid-term price decline to $75.
  • Price Projections and Recommendations: In a bearish scenario, LTC could fall to $70 if Bitcoin’s price declines to 59K. To reduce risk exposure, traders should wait for the price to drop below $75 before buying. The ideal buy range would be around $70-$72 for an optimal entry position. Setting a stop-loss at $68 is advisable to manage potential downside risks and aim for a sell price of $85-$90 to capitalize on the next upward wave.
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In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Adam Mourad
Adam, 23, is a full-time on-chain analyst and part-time trader in the Web3 space. He is the founder and CEO of 0nchained, an on-chain data reporting service. Adam started his journey with CryptoQuant, where he still works as an analyst. Over the past year, he has developed over 30 indicators and written more than 120 analyses. His passions include data and analytics, cryptocurrency, and supercars, particularly red Ferraris and yellow Porsche GT3s. His professional achievements are...