- Litecoin is seeing signs of slowing down after being among the best performers last week
- A look at what investors can expect in the future
Last week saw Litecoin rally as most of the coins that failed were still struggling to bounce back. As a result, Litecoin has been getting a lot of attention, aided by a positive mention from Michael Saylor during an interview. But can it sustain its bullish trend now that the market is showing some signs of a slight recovery?
Read Litecoins [LTC] Price forecast 2023-2024
Litecoin Magazine noted Saylor’s recent remarks in which he described LTC as a store of value. Saylor was one of the pioneers in the cryptocurrency sector, so his statement carried a lot of weight.
This is not the first time @employee Mentioned Litecoin in interviews. He has two more besides his most recent Twitter space. Good to see that he is unbiased and understands sound money. https://t.co/sD0dktSh6d
– Litecoin Magazine ŁⓂ️🕸 (LitecoinMag) November 19, 2022
Saylor’s reference and rating of Litecoin alongside Bitcoin is not taken lightly. Hours after his statement, the cryptocurrency saw a sharp rise in social dominance metrics. Fast forward to the present and Litecoin was among the most popular cryptocurrencies.
The renewed interest in Litecoin had a positive outcome in LTC price action. However, LTC’s momentum has slowed significantly over the past 24 hours, which indicates that the bulls may be losing steam.
Why might Litecoin demand slow down?
A look at the distribution of Litecoin supply reveals why LTC is outperforming the overall market trend. Addresses in the category of 10,000 to 100,000 and those with over 1 million coins have been accumulating since the first week of November. This explains why LTC continued to rise last week.
However, purchasing activity from these titles has seen a significant drop in backlog. Meanwhile, titles containing between 100,000 and 1 million coins were sold out, which contributed to some of the selling pressure. These headliners have leveled off their sales activity over the past two days.
The decline in the uptrend of LTC was accompanied by a change in sentiment. The weighted sentiment gauge has fallen significantly over the past two days. This indicates that investors can expect some decline.
This observation also confirmed why demand has dropped significantly in recent days. The average 90-day lifespan of Litecoin has increased over the past three days. This was a sign that investors held onto their coins during the rally.
Moreover, the MVRV market value has increased significantly in the past three days. This indicates that traders who bought the November lows were in profitable territory at the time of writing.
Why was this important? Well, the short-term traders who bought the recent dip may want to cash in some profits. If so, we should expect the selling pressure to return.
On the other hand, the return of bullish demand could help grow and sustain bullish sentiment among Litecoin investors.