Litecoin (LTC) Whale Activity Increases, But the Cryptocurrency Remains in a Consolidation Phase

Litecoin (LTC), created by former Google engineer Charlie Lee, was trading at $64, where it has been stuck at in the past two weeks.

Litecoin (LTC) price remained in a consolidation phase on Friday as open interest in the futures market remained muted and as whale activity rose. LTC price is trading at $64, where it has been trading in the past two weeks. This price is about 27% above its lowest point in August and down by 44% from its highest point this year.

LTC price remained in a consolidation phase for the past few months as thecoin dropped sharply from its highest point this year. After peaking at $390 in May, Litecoin price crashed to a low of $49 in August. From that low, it has rebounded by about 30%.

On the four-hour chart, it is trading below the descending trendline that connects the highest swings since May 20. It has also remained below the 50-day moving average.

LTC whale activity increases

Created by former Google engineer Charlie Lee, Litecoin (LTC) is the 19th biggest coin in the world. It is a peer-to-peer cryptocurrency that has been around for more than a decade. Like other coins, LTC price crashed sharply in the first half of this year. It then consolidated in August and September.

According to Santiment, a blockchain analytics firm, there has been a significant increase in Litecoin whale-buying activity in the past few weeks. This is a sign that some of them are buying the dip. Santiment has also observed a big increase in the number of social media mentions.

“Litecoin is seeing a consistently higher level of whale activity than usual since late August. On top of this, the level of discussions toward the 19th ranked market cap OG asset has erupted in a big way. Whether or not you are a fan of LTC, this is worth keeping an eye on.”

However, more Santiment data shows that daily active addresses have retreated sharply in the past few months. Litecoin had over 327,000 active addresses on Friday, Sep.6, down from 801,000 in June.

The other big issue is that Litecoin’s futures open interest has been muted in the past few months. Interest in the futures market stood at over $243 million on Sat. Sep 7, down from the year-to-date high of over $708 million.

Futures open interest is an important metric in the financial market because it shows the outstanding contracts that are yet to be filled. In most cases, a higher open interest is a sign that a coin has more demand among investors.

Meanwhile, Litecoin’s funding rate has retreated from 0.078% earlier this week to 0.0016%. A positive funding rate means holders pay a fee to short position holders. With the funding rate nearing the negative zone, there is a risk that it may continue falling.

LTC price technical analysis

On the four-hour chart, LTC price is trading at $64. On the shorter timeframe, the coin is trading below the descending trendline that connects the highest swings since May 20. It has also remained below the 50-day moving average, pointing to further downside.

If this happens, the next key support level to watch will be at $60, the lowest swing on Jan. 3. A break below that support will point to a drop to the next key support at $50, the lowest point in August.

However, a volume-supported move above the descending trendline will point to more gains.

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