- Litecoin (LTC) experiences a significant price drop, hitting its lowest level since November 2022.
- LTC miners may increase selling pressure due to rising costs and declining profitability.
- Despite an increase in Litecoin transaction volume over the past two months, prices continue to trend downwards.
This article explores the recent struggles of Litecoin (LTC), including its price drop, selling pressure from miners, and the implications of increased transaction volume.
Litecoin’s Market Woes
Despite a brief price surge following Grayscale’s victory against the SEC, Litecoin (LTC) has been reined in by bearish market forces. With the price falling below $63, LTC is currently trading at its lowest level since November 2022. Analysts are now questioning whether the bulls have enough strength to absorb the increasing selling pressure.
Increasing Selling Pressure in the Litecoin Market
Amid rising costs and declining profitability, LTC miners could intensify the selling pressure in the coming days. The recent price surge, triggered by Grayscale’s positive decision, did not affect the downward trend of Litecoin miners. Data from IntoTheBlock indicates that they intensified their selling spree in September.
As of September 4, the cumulative balance of LTC miners’ reserves stands at 1.98 million. This represents a drop of 540,000 LTC from the previous month. The Miners Reserves metric tracks real-time changes in the wallet balances of recognized miners and mining pools. Compared to current market prices, the 540,000 LTC drop could mean that miners sold cryptocurrencies worth $34 million last month.
The timing of the depletion of miners’ reserves suggests that the Halving event on August 2 may have triggered the selling frenzy. Unless the trend decreases, Litecoin’s price could trend towards $50, indicating tougher times ahead for LTC holders. Another critical on-chain measurement pointing to challenging times for LTC holders is the current increase in transaction volumes. Despite the rapid price drop, Litecoin’s transaction volume has steadily increased over the past two months.
Rising Transaction Volume in LTC
Between July 1 and September 4, transaction volumes increased by 20%, rising from 11.61 million LTC to 13.88 million LTC. Meanwhile, Litecoin’s price fell by 41% during this period, dropping from $107 to $62.93. This creates a negative divergence between Litecoin’s price and trading activity. Typically, increasing transaction volumes indicate increased liquidity or interest in the underlying asset, which are positive developments.
However, the simultaneous price drop could indicate that Litecoin’s selling pressure outweighs buying pressure, leading to falling prices. In conclusion, the continuous decline in miners’ reserves could potentially intensify downward winds in the coming days.
