Litecoin (LTC) bears are back in control after Grayscale’s landmark victory over the SEC last triggered a brief price rally toward $0.70. On-chain data examines if the bulls have enough in the tank to absorb the growing selling pressure.
With prices wobbling below $63, Litecoin (LTC) is currently trading at its lowest since November 2022. Amid rising costs and dwindling profitability, LTC Miners could further exacerbate the bearish pressure in the coming days.
Litecoin Miners Are Pilling on Sell Pressure
The recent price rally from the positive Grayscale ruling did not sway the bearish Litecoin miners. Data from IntoTheBlock shows that they have intensified their selling frenzy in September.
As of Sept 4, cumulative balances of LTC Miners’ reserves now stand at 1.98 million. This represents a decline of 540,000 LTC over the past month.
Miners Reserves tracks real-time changes in the wallet balances of recognized miners and mining pools. When benchmarked to the current market prices, the 540,000 LTC decline means that the miners have sold off coins worth $34 million over the past month.
The timing of the Miners’ reserves depletion also suggests that the Halving event on August 2 may have triggered the selling frenzy. Unless the trend abates, Litecoin’s price could be at risk of a bearish reversal towards $50.
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Rising Transaction Volumes Amid Price Correction Suggests Growing Selling Pressure
Another critical on-chain metric signaling tougher times ahead for LTC holders is the current rise in Transaction Volumes. While the price has declined rapidly, Litecoin Transaction Volume has consistently increased over the last two months.
Between July 1 and September 4, Transaction Volumes grew 20% from 11.61 Million LTC to 13.88 Million LTC. Meanwhile, Litecoin’s price dropped by 41% from $107 to $62.93 during that period. This establishes a negative divergence between Litecoin price and trading activity.
Typically, Rising transaction volumes indicate increased liquidity or growing interest in the underlying asset, which are positive developments. However, the simultaneous price drop suggests that Litecoin’s selling pressure outweighs buying pressure, leading to lower prices.
In conclusion, the continuous decline in Miners’ reserves will likely intensify the bearish headwinds in the coming days.
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LTC Price Prediction: The $60 Support Is at Risk
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The indicators analyzed above suggest the mounting bearish pressure could spark another price reversal toward the $50 range.
The In/Out of Money Around Price data depicts the entry price distribution of the current Litecoin holders also validates this thesis.
It, however, highlights that bears will face a considerable obstacle around the $60 territory.
As shown below, the 147,000 holders had bought 1.54 million LTC at the minimum price of $59. If they defend their positions, it could trigger an early Litecoin price rebound.
But if the bearish miners keep selling, the LTC price could drop toward $50, as predicted.
Conversely, the bulls could invalidate that pessimistic Litecoin price prediction by reclaiming $75. However, 230,000 addresses had bought 3.23 million LTC coins at the maximum price of $65. If they chose to sell, the resistance level could once again prove daunting for the bull.
Although unlikely, if that resistance level does not hold, Litecoin’s price could eventually hit $80.
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