LUCKNOW (CoinChapter.com) — Litecoin’s (LTC) price touched $85, its highest value since Terra’s (LUNA) downfall triggered a market-wide collapse in early May. Meanwhile, the coin has saliently amassed a 40% rise over two weeks.
Dormant tokens on the move
Incidentally, the spike occurred when dormant LTC tokens began moving to different addresses, highlighting renewed interest in the cryptocurrency.
Preceding the rally, Litecoin saw the highest movement of dormant tokens in the past four years. Santiment compared this data with the average price invested into LTC outside of exchanges to indicate a bullish potential for retail investors.
The metric used by Santiment can have different interpretations. For example, when idle tokens move, it can point to a shift from accumulation to distribution. However, it can also be interpreted as growing interest among holders who want to benefit from tokens instead of keeping them in their wallets.
Litecoin(LTC) Technical Analysis
From a technical standpoint, Litecoin had more room to grow. On Nov 23, LTC closed above its descending channel for the first time in nearly seven months. Since then, the candles have traded above the upper trendline – a sign that bulls proactively supported LTC’s ascent.
Although descending channels are considered bearish, a move above the upper trendline is a positive development which indicates a shift of sentiment to bullish.
Judging by LTC’s trajectory, a move to $92-$104 would be possible if the broader crypto market remains stable. However, the $92-$104 zone was LTC’s next major resistance, and another breakout would be required for further gains.
However, the projection to $92-$104 might be delayed by a correction. The daily RSI was hovering around overbought levels, which showed that LTC was trading above its perceived intrinsic value. Prices usually tend to stabilize once the RSI is at either of its extreme ends.
Furthermore, IntoTheBlock showed that 421.5 K addresses were currently profitable between $70-$83 when a large percentage of addresses move to profits between two price points. Threats of profit-taking increase the likelihood of a correction.
The order book showed sell orders had begun to creep up on exchanges, erasing any near-term bullishness.
Nonetheless, the daily 20-SMA, hovering around $75 support, would likely keep sellers at bay.
However, sentiment might turn bearish if this conjunction fails to curtail selling pressure. A move within the channel would put Litecoin back within a bearish projection, where the focus would shift back to the lower trendline.
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