- Litecoin shows less network activity as uncertainty tightens its grip over the market.
- LTC pushes down to a 200-day moving average but demand is still lacking.
July is approaching its conclusion and Litecoin’s performance during the month has been plagued by performance jitters. The anatomy of Litecoin’s performance in the last four weeks may offer perspective into why the highly anticipated rally has not taken place.
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The weight of expectations weighed heavily on Litecoin this month as the halving countdown narrowed. Unfortunately, it performed contrary to those expectations.
This outcome wasn’t only seen in its price action but also in the overall network performance. Address growth and network activity have been relatively stagnant during the last 4 weeks.
#Litecoin network activity has remained stagnant over the past month, with no significant increase in new and active $LTC addresses!
This indicates reduced interest, demand, and trading activity, which might affect #LTC price despite the upcoming #halving. pic.twitter.com/EHYV9MHHlg
— Ali (@ali_charts) July 26, 2023
A possible reason for the underwhelming outcome could be the uncertainty that prevailed in the market in July. An assessment of Litecoin’s on-chain metrics revealed that transaction volume stayed within the same relative range.
The number of daily active addresses dipped considerably during the same period.
Source: Santiment
It was worth noting that active addresses registered a large spike in the last 24 hours. This was the largest spike we have seen in the last two weeks. Could this translate to incoming buying pressure? Well, LTC did not register any notable change in its price action within the same 24-hour period.
LTC exchanged hands at $89.40 at press time after barely making any significant directional movement in the last 24 hours. Interestingly, the cryptocurrency also showed signs of price slippage earlier in the week. However, that downside halted at its current level right on the 200-day moving average.
Source: TradingView
On the Relative Strength Index (RSI) front, Litecoin stood in the lower half of the relative strength spectrum. While this may not necessarily indicate that prices will continue down, it underscores the continued price weakness we have seen over the last four weeks. But why has LTC been tanking despite heavy bullish expectations?
Bulls are humbled as liquidations push lower
The market often moves contrary to what the masses expect. That might be the same outcome with Litecoin price action. Whales may have started selling and executed short positions to take advantage of the incoming liquidity as well as a potential downside.
We observed a bit of a spike in open interest at the start of July, followed by a surge in long liquidations compared to short liquidations.
Source: Coinglass
Read about Litecoin’s price prediction for 2023/2024
The current market sentiment is still bullish despite Litecoin’s dip. Also, LTC’s price action has been moving in tandem with the rest of the crypto market. This means that Litecoin will likely pivot when the overall market conditions improve. It is still unclear if the real price excitement will come as the halving draws closer.