Litecoin [LTC], one of the leading cryptocurrencies in terms of market value, has been defying the general downward trend observed in the cryptocurrency market in recent weeks.
While many major cryptocurrencies have experienced significant drops, with declines of 5% or more, Litecoin has managed to maintain its position and even show an increase.
During the last two weeks, Litecoin has seen a rise of 3.5%, and just in the past week, it has surged by 9.5%.
Nonetheless, in the last 24 hours, there has been a slight pullback, resulting in LTC dropping by 0.5%, with a current trading price of $65.88 at the time of writing.
Potential for Further Growth in Litecoin?
The positive price movement of LTC has drawn the attention of traders and analysts. One notable cryptocurrency analyst, ZAYK Charts, shared a technical assessment of Litecoin on X (previously known as Twitter).
According to ZAYK Charts, Litecoin was trading within a descending channel pattern on its 1-day chart, indicating a potential upcoming breakout.
In trading, a descending channel pattern is a technical formation where the price of an asset moves between two downward-sloping parallel trendlines.
This pattern suggests the possibility of a breakout when the price touches the lower boundary of the channel.
A breakout occurs when the price breaks above the upper boundary of the channel, suggesting the end of the downward trend and a potential reversal upwards.
As per ZAYK Charts, if Litecoin successfully breaks out of this descending channel, the next target price for the asset could reach as high as $100.
This forecast is based on past technical patterns observed in the market.
However, the breakout largely hinges on market momentum and Litecoin’s ability to garner enough bullish support to surpass its resistance levels.
Fundamental Analysis of LTC
In addition, there have been intriguing developments in Litecoin’s fundamental data to support the potential breakout.
According to Coinglass data, Litecoin’s Open Interest is on an upward trajectory, rising by 1% to a current value of $243.96 million.
Open Interest refers to the total number of active derivative contracts (such as futures and options) that have not been settled.
The increase in Open Interest indicates the growing number of traders opening positions in Litecoin, which may suggest increasing interest and confidence in a potential price surge.
Another critical metric to watch for Litecoin is the spent output profit ratio (SOPR), which assesses whether holders are selling their assets at a profit or a loss.
An SOPR value of 1.0 implies that coins are being sold at their initial purchase price, while a value above 1.0 indicates holders are selling at a profit, and a value below 1.0 suggests selling at a loss.
Based on Glassnode’s data, Litecoin’s SOPR has recently shown a minor recovery. After dropping below 1.0 earlier last month, the metric has now returned to 1.0.
This signals that on average, LTC holders are now seeing a break-even point on their sales, hinting at a stabilization in the market.
An increasing SOPR could indicate a positive outlook for LTC’s price, suggesting a reduction in selling pressure and growing buyer confidence.