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

Christian Encila

1 year ago

3 mins read

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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).

Featured image from Shutterstock

Christian Encila

They say journalists never truly clock out. But for Christian, that's not just a metaphor, it's a lifestyle. By day, he navigates the ever-shifting tides of the cryptocurrency market, wielding words like a seasoned editor and crafting articles that decipher the jargon for the masses. When the PC goes on hibernate mode, however, his pursuits take a more mechanical (and sometimes philosophical) turn.

Christian's journey with the written word began long before the age of Bitcoin. In the hallowed halls of academia, he honed his craft as a feature writer for his college paper. This early love for storytelling paved the way for a successful stint as an editor at a data engineering firm, where his first-month essay win funded a months-long supply of doggie and kitty treats – a testament to his dedication to his furry companions (more on that later).

Christian then roamed the world of journalism, working at newspapers in Canada and even South Korea. He finally settled down at a local news giant in his hometown in the Philippines for a decade, becoming a total news junkie. But then, something new caught his eye: cryptocurrency. It was like a treasure hunt mixed with storytelling - right up his alley!

So, he landed a killer gig at NewsBTC, where he's one of the go-to guys for all things crypto. He breaks down this confusing stuff into bite-sized pieces, making it easy for anyone to understand (he salutes his management team for teaching him this skill).

Think Christian's all work and no play? Not a chance! When he's not at his computer, you'll find him indulging his passion for motorbikes. A true gearhead, Christian loves tinkering with his bike and savoring the joy of the open road on his 320-cc Yamaha R3. Once a speed demon who hit 120mph (a feat he vowed never to repeat), he now prefers leisurely rides along the coast, enjoying the wind in his thinning hair.

Speaking of chill, Christian's got a crew of furry friends waiting for him at home. Two cats and a dog. He swears cats are way smarter than dogs (sorry, Grizzly), but he adores them all anyway. Apparently, watching his pets just chillin’ helps him analyze and write meticulously formatted articles even better.

Here's the thing about this guy: He works a lot, but he keeps himself fueled by enough coffee to make it through the day - and some seriously delicious (Filipino) food. He says a delectable meal is the secret ingredient to a killer article. And after a long day of crypto crusading, he unwinds with some rum (mixed with milk) while watching slapstick movies.

Looking ahead, Christian sees a bright future with NewsBTC. He says he sees himself privileged to be part of an awesome organization, sharing his expertise and passion with a community he values, and fellow editors - and bosses - he deeply respects.

So, the next time you tread into the world of cryptocurrency, remember the man behind the words – the crypto crusader, the grease monkey, and the feline philosopher, all rolled into one.

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