Litecoin, a peer-to-peer cryptocurrency, has been in a consolidation phase recently as open interest in the futures market remains muted and whale activity increases.

LTC Whale Activity Increases

Created by former Google engineer Charlie Lee, Litecoin (LTC) was trading at $64, a price it has hovered around for the past two weeks. This price is approximately 27% above its lowest point in August and down by 44% from its highest point this year. The recent price action closely correlates with Bitcoin (BTC), which reached a record high of $73,800 in March, dropped to $49,000 in August, and was trading at $54,000.

According to Santiment, there has been a significant increase in whale-buying activity for Litecoin in the past few weeks, indicating that some investors are buying the dip. Additionally, Santiment has observed a considerable increase in the number of social media mentions related to Litecoin.

Litecoin is seeing a consistently higher level of whale activity than usual since late August. On top of this, the level of discussions toward the 19th ranked market cap OG asset has erupted in a big way. Whether or not you are a fan of LTC, this is worth keeping an eye on.

However, more data from Santiment shows that daily active addresses for Litecoin have sharply decreased in the past few months. On September 6th, Litecoin had over 327,000 active addresses, down from 801,000 in June.

Muted Futures Open Interest

Another significant issue is that Litecoin’s futures open interest has been muted in recent months. Interest in the futures market was over $243 million on September 7th, down from the year-to-date high of over $708 million. Futures open interest is a crucial metric as it indicates the outstanding contracts that are yet to be fulfilled. Typically, higher open interest is a sign of increased demand among investors.

Meanwhile, Litecoin’s funding rate has dropped from 0.078% earlier in the week to 0.0016%. A positive funding rate means holders pay a fee to short position holders. With the funding rate nearing the negative zone, there is a risk that it may continue to decline.

Technical Analysis: Litecoin Below Key Resistance Level

Technically, Litecoin is below the descending trendline that connects the highest swings since May 20th. It has also remained below the 50-day moving average, indicating potential further downside. If this trend continues, Litecoin may drop to the next key support level at $60, its lowest swing on January 3rd. A break below that support level could lead to a drop to the next key support at $50, its lowest point in August. However, a volume-supported move above the descending trendline could signal potential gains.

Stay updated with the latest news and insights on cryptocurrencies, investing, and finance by exploring more on Global Crypto News.

Post Views: 3