Litecoin woke up from months of slumber to follow general market sentiment. The price of LTC broke the USD 200 resistance only to fall with the flash crash of the crypto market.
At the time of writing, Litecoin is trading at $ 181, down 17.31% on the daily chart.
LTC is in a downtrend on the daily chart. Source: LTCUSDT Tradingview
The market appears to be reacting to the events sparked when El Salvador made Bitcoin legal tender. Whales could have used the bullish sentiment to depress prices, trigger liquidations and take new positions.
Despite the crash, analyst Ali Martinez believes Litecoin could regain its upward momentum. Since the beginning of August, the number of unique addresses that have joined the network has reached a higher peak, the analyst said.
As you can see below, this metric was 220,000 newly created addresses on September 6th alone. The number of new addresses from Glassnode is useful for measuring the number of users with fresh capital pouring into LTC and “could be interpreted as a sign of optimism,” Martinez said.
Source: Glassnode via Ali Martinez
In addition, large investors went on a “buying frenzy” with the number of addresses ranging from 10,000 to 100,000 in the last 30 months adding over 720,000 LTC. This coincides with the rise in Litecoin price as seen below.
Source: Santiment via Ali Martinez
Additional data provided by IntoTheBlock records around 170,000 addresses that bought 3 million Litecoin when the price was $ 222. Martinez believes this is the next big opposition. LTC’s price needs to rebound and rise above to push past highs.
The support is greater than the resistance in terms of volume. Still, prices will have to cross the $ 222 mark to move forward.
Litecoin, Solana, Polkadot, follow the bearish trend
Almost no altcoin in the top 20 by market cap was able to hold its profits. Litecoin performed worst on the last day, followed by Internet Computer (ICP) with a 23% loss, Polkadot (DOT) with a 17.3% loss, and Cardano (ADA) with a 16.6% loss.
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These altcoins have proven to be resilient to previous downtrends. Only Solana (SOL) posted a gain of 10.7% on the daily chart due to the growth of its ecosystem.
In the short term, Bitcoin could determine the fate of the entire market. Litecoin has solid fundamentals for a rebound, but the loss of BTC’s key support at $ 43,000 could potentially trigger further decline to its previous range around the high $ 30,000 levels.