Litecoin (LTC) Holders Realize Losses as the Altcoin Begins to Trend Within a Falling Wedge Pattern

Yesterday, Litecoin (LTC) closed above its falling wedge pattern, signaling a spike in buying pressure. The altcoin had traded within this pattern since March 31.

LTC closed above its falling wedge pattern yesterday, signaling a spike in buying pressure. The altcoin had been trading within this pattern since March 31.

This marked a bullish milestone for the altcoin, but traders who capitalized on the rally by selling their holdings incurred significant losses.

LTC Holders Suffer Losses on Investments

An asset is said to be trading within a falling wedge pattern when its price trends between two converging downward-sloping trend lines. The upper trend line acts as a resistance level, while the lower trend line serves as support.

Litecoin began to trend within this pattern on March 31, leading its price to plummet by 27% during this period. At the time of this writing, the altcoin was trading at $71.74.

When an asset’s price breaks above the falling wedge, it is considered a bullish signal. This indicates that buyers are overpowering sellers and that the price is likely to trend upward.

However, on-chain data showed that some market participants who capitalized on the breakout to sell their holdings incurred significant losses yesterday.

This is evident in the coin’s Network Realized Profit/Loss (NPL) metric readings. Yesterday, the metric dipped to -5.25 million.

An asset’s NPL tracks whether the holders of an asset across its entire network are selling at a profit or loss.

When this metric’s value dips like this, it indicates that, on average, holders are realizing losses on their investments. This suggests a bearish market sentiment, as traders are panic selling and experiencing capitulation.

LTC Price Prediction: Price Rally May Not Be Sustainable

An examination of LTC’s Price-Daily Active Address (DAA) Divergence metric suggests that the recent uptick in the altcoin’s value may not be sustainable.

This metric compares an asset’s price movements with the changes in its number of daily active addresses. Investors use it to gauge whether the price movements are supported by corresponding network activity.

At press time, LTC’s Price DAA Divergence is pegged at -36.78. This indicates that the coin’s price is increasing at a faster rate than its DAA. This suggests that the price rise may be driven by speculation or short-term buying rather than increased adoption or long-term investor interest. As a result, the coin risks shedding its recent gains.

If this occurs, LTC’s value could drop to $70 at the 0.236 Fibonacci retracement level.

It may continue its upward climb to then trade at $78.11 if the current trend persists.

The above is the detailed content of Litecoin (LTC) Holders Realize Losses as the Altcoin Begins to Trend Within a Falling Wedge Pattern. For more information, please follow other related articles on the PHP Chinese website!