- Litecoin’s price drop to $94 was linked to profit-taking, but key metrics signal a potential rebound.
- Shrinking exchange reserves and an all-time high hash rate indicate a waning selling pressure.
Litecoin [LTC], like other altcoins, experienced significant price swings due to recent crypto market tremors and volatility.
Triggered by Trump’s reserves statement, LTC surged but later dropped 30%, testing a crucial demand zone at $94.
Despite the sharp decline, LTC shows recovery signs, with key metrics signaling a bullish future if the demand zone holds strong.
The profit-taking phase weighs on LTC but…
Analysts link the recent LTC price drop to profit-taking after prolonged inactivity, a common behavior after rapid surges. Investors capitalized on past gains, causing LTC to tumble to the $94 support level.
However, LTC showed green signals, in the last 24 hours, hinting at a potential reversal.
At the time of writing, the Stochastic RSI, a key momentum indicator, was in the oversold zone, suggesting LTC might be undervalued. Oversold conditions often precede upward price movements, making this a critical zone for market participants to monitor.
Source: TradingView
On chain metrics support the bullish technical indicators
LTC’s on-chain data is also adding to the aforementioned market’s positive sentiment. The altcoin network hash rate recently hit an all-time high, indicating healthy miner activity and network security.
A rising hash rate is a positive sign and typically indicates confidence in the asset’s long-term prospects.
Source: Bitinfocharts
LTC exchange reserves have significantly declined, reducing the number of coins available for sale on exchanges.
This decrease in reserves lowers selling pressure, positively impacting LTC’s price stability.
For newcomers, declining exchange reserves usually suggest investors are transferring holdings to long-term storage, anticipating future price appreciation.
Source: IntoTheBlock
With the Stochastic RSI signaling oversold conditions, the hash rate at record highs and exchange reserves dwindling, the sentiment around LTC is turning bullish.
If LTC maintains support above the $94 demand zone, it may rally and test higher resistance levels in the near term.
Credit: Source link