Is Litecoin Poised for a Significant Upward Movement Based on Recent Data?
Litecoin (LTC) has been on an upward trend since August, undergoing a period of consolidation. While it initially seemed to be lagging behind in recent market excitement, the latest developments suggest a change in this perspective.
There has been notable activity from Litecoin bulls in the current month, coupled with shifting liquidity dynamics in the cryptocurrency.
Recent data indicates that LTC has just witnessed its highest net inflows since November 2021, a period that coincided with the peak of Litecoin’s price surge in the previous bullish cycle. Could this uptick in net inflows be a precursor to a significant rally for LTC?
The current data trends imply a renewed interest in Litecoin amongst investors.
Moreover, recent reports show that short-term holders have been increasing their Litecoin holdings, with their balances growing by 31% over the past four weeks.
According to insights from IntoTheBlock, the recent surge in liquidity could be a signal of an impending major rally for Litecoin as a shift in liquidity unfolds in the crypto market.
Notably, the spike in liquidity is not solely confined to the derivatives market. Coinglass reports that Litecoin’s Open Interest (OI-Weighted Funding Rates) has reached its highest point in the last six months.
This spike confirms a peak in the derivatives market for Litecoin.
The Volatility of Litecoin Triggers a Wave of Liquidations
The past 24 hours have seen extreme volatility for Litecoin, with the price attempting to break out of its established range.
Initially, there was a drop to $68 in what appeared to be a bearish move, only to be followed by a substantial surge in demand that pushed the price to $82.78.
At the time of reporting, LTC had retraced to $75.71, bringing it back within the ascending consolidation range. However, this erratic price movement indicates a potential liquidation event for both short and long positions.
Litecoin’s price behavior had previously shown a significant surge in demand around the 6th of November, resulting in six consecutive days of gains.
As a result, the appetite for long positions has been increasing, with long positions surpassing shorts as of the 11th of November.
Within the last 24 hours, exchanges saw a total of $3.09 million in Litecoin liquidations, with long positions comprising $2.04 million and short positions $1.06 million. This outcome suggests that the recent pullback following a breakout attempt may have led to a significant number of long positions being liquidated.