- Litecoin Wallets Profit Percentage Hits Highest Level Since 2021 After Recent Gains
- A bearish reversal is likely after an inverted cup and handle pattern on the lower time frame.
Litecoin (LTC) has gained more than 50% over the past month, reflecting widespread gains in the altcoin market. However, despite this rally, some analysts believe Litecoin could be dead.
In an X post, popular analyst Ali Martinez note that LTC is now trading at the same price as in 2017. Additionally, he argued that it now lacks strong fundamentals to drive long-term growth.
According to him, although LTC may continue to see gains in the short term, it will remain stuck in a consolidation range.
Litecoin Wallet Profitability Reaches Highest Level in 2021
However, despite this bearish outlook, Litecoin’s recent gains have led to an increase in the number of wallets generating profits to their highest levels since 2021. In fact, data from IntoTheBlock revealed that 78% of LTC holders, or the equivalent of 6.33 million addresses, are now profitable.
Conversely, losing portfolios fell from 46% to 16% in just one month.
Source: In the block
An increase in portfolio profitability could increase market confidence and lead to a bullish outlook for Litecoin.
However, some traders who bought early and those who bought during the rally could start taking profits, leading to a weakening of the trend.
Is a high address count a positive indicator?
The number of active addresses on Litecoin stood at 364,000 at press time – a higher number than for most altcoins. For example, Cardano (ADA), an altcoin with a four-times market capitalization, has around 41,000 active addresses.
(Source: In the block)
On the contrary, a long-term look revealed that Litecoin’s address count was on a downward trajectory. Especially since at the start of the year, active addresses numbered more than a million.
This suggests that Litecoin’s utility has declined this year, which could negatively impact the price.
Litecoin Price Analysis as THESE Bearish Signs Emerge
At press time, Litecoin was trading at $123 after gains of 1.57% in 24 hours. This altcoin could be on the verge of a downtrend after an inverted cup and handle pattern appeared on its four-hour chart.
If Litecoin succumbs to this bearish pressure and the price reverses, traders should be wary of this trend necking out to $100.65. Especially since a drop below could trigger more losses.
(Source: Tradingview)
The Chaikin Money Flow (CMF) implies that buying pressure has weakened due to its fall to the zero line. If it turns negative, it could indicate an increase in selling activity which could lead to downtrends.
At the same time, the moving average convergence and divergence (MACD) histogram bars indicated weak buying pressure. However, the MACD line on the lower time frame was positive – a sign that momentum was still slightly bullish.
Litecoin Open Interest Drops
Finally, Coinglass data indicated that speculative activity around Litecoin fell after hitting a multi-month high earlier this month, when OI surged to $706 million.
At press time, Litecoin’s OI had fallen to $531 million – a sign that some traders had closed their positions.
(Source: Coinglass)
A decline in OI could mean bearish sentiment due to reduced market participation as traders become cautious and indecisive.
