- Litecoin is seeing signs of a slowdown after being in the top performers list last week
- A look at what investors can expect in the future
Last week, we saw Litecoin reaching upside potential as most of the failed top coins struggled to bounce back. As a result, Litecoin received a lot of attention, aided by a favorable mention by Michael Saylor during an interview. But can it maintain its upside as the market shows signs of a mild recovery?
Read Litecoins [LTC] price forecast 2023-2024
Litecoin Magazine took note of Saylor’s recent statements describing LTC as a store of value. Saylor has been one of the leading authorities in the crypto segment hence his statement carried a lot of weight.
This is not the first time @saylor has mentioned Litecoin in interviews. He has two more in addition to the recent twitter space. Good to see he is not biased and understands sound money. https://t.co/sD0dktSh6d
— Litecoin Magazine Ⓜ️🕸 (@LitecoinMag) November 19, 2022
Saylor’s brief mention and categorization of Litecoin alongside Bitcoin was not taken lightly. Hours after his statement, the cryptocurrency experienced a surge in its social dominance metric. Fast forward to the present day and Litecoin was one of the most popular cryptocurrencies.
The renewed interest in Litecoin had a favorable outcome in LTC’s price action. However, LTC’s momentum has slowed significantly over the past 24 hours, indicating that the bulls may have lost their appetite.
Why Litecoin Demand May Be Slowing
A look at the Litecoin supply distribution revealed the reason for LTC to overcome the general market direction. Addresses in the 10,000 to 100,000 category and addresses with more than 1 million coins have been piling up since the first week of November. This explained why LTC continued to rise last week.
However, the buying activity of these addresses witnessed a noticeable slowdown in their accumulation. Meanwhile, addresses worth between 100,000 and 1 million coins have been sold, contributing to some selling pressure. These top addresses have leveled off their sales activity over the past two days.
The slowdown in LTC’s rise has been accompanied by a shift in sentiment. The weighted sentiment metric has fallen significantly over the past two days. This indicated that investors may have been expecting some downward trend.
This observation also confirmed why demand had fallen so sharply in recent days. Litecoin’s 90-day average coin age has increased over the past three days. This was a sign that investors were holding on to their coins during the rally.
In addition, the market value to realized value (MVRV) ratio also achieved a significant increase in the past three days. This indicated that the traders who bought at last November’s lows were in profitable zones at the time of writing.
Why was this important? Well, short term traders who bought into the recent dip may want to cash out some profits. If that were the case, we should expect a resurgence in selling pressure.
On the other hand, a return of bullish demand may help to cultivate and sustain bullish sentiment among Litecoin investors.