Litecoin to shed recent gains as sell-offs intensify
- Litecoin’s price increased by almost 5% in the past 24 hours.
- However, price movements on a daily chart revealed non-stop coin distribution.
As the market recovers from the aftermath of last week’s liquidity exit, Litecoin [LTC] ranks as one of the assets with the most gains in the last 24 hours, on-chain data provider Santiment noted in a tweet.
? After #crypto market caps dropped sector-wide last week, several #altcoins are scratching their way back, particularly $LTC, $XRP, & $XLM. With market value to realized value metrics continuing to show traders are down big, don't be surprised if the trend continues this week. pic.twitter.com/cX8q9Tcu7B
— Santiment (@santimentfeed) August 21, 2023
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According to CoinMarketCap, the coin has gained over 3% in the past 24 hours, exchanging hands at around $66 per coin.
Santiment noted that the general market slump might linger in the new week, with the market value to realized value ratio of most assets suggesting that holders have continued to sell at a loss.
Despite the slight uptick in the last 24 hours, LTC’s set up on a daily chart revealed that the coin might shed these gains in the coming days.
The flickering “Lites” do not symbolize recovery
A broader look at LTC’s price showed that its price declined by 20% in the last week. As sentiment turned sour on 15 August, the altcoin’s Awesome Oscillator (AO) began to post downward-facing red histogram bars.
The AO is a momentum indicator that tracks potential reversals in the market. A bullish crossover occurs when the AO crosses above the zero line, indicating that the momentum is turning positive. Conversely, a bearish crossover is seen when the AO crosses below the zero line, signalling that the momentum is turning negative.
LTC’s AO was negative, with a value of -18.89 at press time, suggesting that bears ran the current market.
Further, the coin’s On-balance Volume (OBV) has declined in the last week. The beginning of LTC’s OBV decline coincided with when its AO turned negative, lending credence to the above position.
When an asset’s OBV falls, it indicates that there is more selling pressure in the market than buying pressure, which often results in a decline in an asset’s value.
Read Litecoin’s [LTC] Price Prediction 2023-24
In addition, momentum indicators trended downwards at press time and have been positioned the same since the beginning of the month. At press time, LTC’s Relative Strength Index (RSI) was 22.72, while its Money Flow Index (MFI) was 28.18.
At these values, both indicators hinted that LTC would soon be oversold if sentiments remained unchanged. Thereby putting further pressure on its price.