LTC whales have started selling off their holdings. Open interest has been on a decline in the past two weeks. On 23 January, on-chain data provider Santiment warned investors that Litecoin’s [LTC] price may drop in the coming days due to an increase in selling activity among whales. According to the report, the coin distribution […]
Mirroring the growth in the general cryptocurrency market in the last few weeks, LTC’s Open Interest rose by 14% between 1 – 12 January.
An increasing open interest in the crypto market meant that more traders were opening new positions in derivatives such as futures or options. It typically indicated an increased activity and interest in the market. It also suggested that more traders were becoming confident in the market and were looking to take advantage of potential price movements.
However, as profit-taking began, and many traders closed off their LTC trade positions, the alt’s Open Interest soon fell. At $337 million at press time, LTC’s Open Interest fell by 13% since 12 January, data fromA decline in an asset’s Open Interest is often taken as a bearish signal. It indicates that traders are closing out their positions, which could signal a lack of confidence in the current direction of the market or a decrease in overall activity.
A decreasing CMF value, combined with a high price, can indicate that the market is overbought and that there may be potential for a price correction. This could mean that although Litecoin’s price was high, the buying pressure behind it is decreasing, which could suggest that the market is becoming more bearish and that traders are becoming more hesitant to buy at such high prices.
This situation could be a sign that traders should consider taking profits or reducing their exposure to the market.Subscribe to get it daily in your inbox.
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Will Litecoin see a dip to $85 before its next push higher?Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion. The daily timeframe remained bullish, but a pullback could occur. On-chain metrics and a positive funding rate also highlighted bullish expectations. Litecoin retested the bullish order block at $81.6 and bounced to trade at $88.6 […]
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