Litecoin – Large withdrawals and how they could affect LTC price action

July 7, 2024

LTC’s recent gains could be dented by large holder sell-off
On-chain data showed strong support at $61.27 and could be crucial to overcome the overhead resistance.

Although the price of Litecoin (LTC) has recovered some of its losses, it still faces a major challenge. AMBCrypto found this out after analyzing the netflow of the altcoin’s large holders.

This week, the price of Litecoin could not resist the crash like the rest of the market. On July 5, the value of the cryptocurrency fell to $57.55. However, in the last 24 hours, there was a 7.05% increase, when LTC changed hands for $62.50.

Litecoin stars leave the coin

Despite the surge, however, it is uncertain whether the cryptocurrency will sustain its recent jump. In fact, according to data from IntoTheBlock, at the time of writing, the netflow of large investors has dropped by 95.84% over the past 7 days.

Simply put, the metric is the difference between the inflow and outflow of large holders. For comparison, large holders are addresses that hold at least 0.1% to 1% of the total circulating supply.

When the net inflow is positive, large investors accumulate more than they sell. On the contrary, when it is negative, it means that these holders sell more than they buy. This is also the case with LTC.

Source: IntoTheBlock

If the value remains negative, Litecoin’s uptrend could be halted. However, if inflows exceed outflows, the value could remain above $60 in the short term and possibly approach the $70 mark.

Nevertheless, AMBCrypto found it necessary to evaluate other data sets to gain insights into LTC’s potential direction. To this end, we evaluated the altcoin’s investor capitalization.

LTC price is near the bottom, could trade higher

This metric is the difference between the realized cap and the thermocap. The result of this calculation indicates whether the coin has reached the peak or the bottom.

If the investor capitalization is increasing, it indicates that the coin is near the peak of this cycle, but if the value is low, it means that the price is near the bottom.

According to Glassnode, the value was at a low, suggesting that LTC may be undervalued.

Source: Glassnode

As for the short-term outlook, AMBCrypto then looked at the In/Out of Money Around Price (IOMAP) indicator. The IOMAP groups addresses into those in profit and those in loss, depending on their average accumulation price.

As a result, the metric acts as support or resistance. The larger the cluster of addresses within a price range, the stronger the support or resistance.

At press time, data showed that 128,140 addresses bought 485,190 LTC at an average price of $63.39. This group had no money left. On the other hand, 135,090 addresses bought 1.51 million LTC for around $61.27. This group had money.

Since there were a larger number of addresses with a lower value, it indicated that Litecoin has a strong support on the charts. Considering this position, there is a high probability that Litecoin will overcome the resistance at $63.39.