Litecoin (LTC) price saw a noticeable increase in the number of short-term traders.
It spiked by over 12% in the past month, reaching approximately 560,000 addresses.
This surge was likely linked to the buzz around potential Litecoin ETF approvals, fueling speculative trading activities.
Analyzing the trajectory, the count of addresses dipped initially in late January.
It went down to a low near 500,000 before rebounding strongly in early February.
The fluctuation suggested a volatile response from traders to news and market sentiment.
This often resulted in quick entries and exits from the market.
With the rise in Litecoin short-term trading, the potential scenarios for Litecoin’s price are mixed.
On the one hand, the increased trading activity could lead to higher volatility,
There’d be sharp price movements if the ETF news continues to stir interest.
Conversely, without substantial follow-through or approval of the ETF, the inflated trader numbers might not sustain, possibly leading to a sharp correction.
Historically, similar spikes in trader activity have preceded both rallies and corrections, depending on broader market conditions and investor sentiment.
Current indicators show a clear increase in engagement. So the next move for Litecoin price could hinge critically on further developments around ETF prospects.
Why Litecoin Price Potential Drop is Key?
Looking at the Litecoin price action, the chart revealed a critical juncture at $124.23.
It looked poised just above a significant support zone at $116.06, with potential dips projected towards $104 – $108.
This price action aligned closely with key resistance levels previously observed at $151.60.
That indicated a robust trading range that’s influencing current movements.
RSI, currently at 60.77, suggested that while LTC was neither overbought nor oversold, it leans towards bullish territory, indicating slight buyer momentum which could temper a rapid decline.
However, historical data from previous months shows fluctuation between support levels of $101.84 and $77.71.
These signify the areas could again play crucial roles in upcoming price actions.
Price projections based on the RSI and recent support tests suggested two scenarios: First, if buyer momentum continues as indicated by the RSI staying above the midline, Litecoin price might stabilize or bounce back towards the upper resistance near $133.92.
Conversely, a weakening RSI, potentially triggered by broader market sentiment or negative news, could push prices down to revisit the $104-$108 support zone, a level not seen since the early rallies of late 2024.
The MACD indicator, showing a convergence around the signal line with a slight bearish bias, supports the potential for downward price action in the short term.
This could lead to testing lower support levels if sell-offs increase, aligning with historical patterns where significant support tests have led to either substantial rebounds or further declines.
In sum, Litecoin price’s immediate future might see it testing lower supports due to current technical setups unless sufficient buying pressure emerges to counteract the bearish trends observed.
The next few weeks are crucial to determine if the current support holds or if LTC will descend further, testing the resilience of lower price thresholds.
