The cryptocurrency market is often characterized by its extreme volatility, with prices swinging wildly within short periods. Litecoin (LTC), a popular cryptocurrency, experienced a significant drop in its price below $60 on September 11, 2023. This was the first time since the infamous FTX Exchange crash in November 2022 that LTC had dipped below this level. However, amidst the uncertainty, there are signs of growing optimism among long-term investors, potentially setting the stage for a Litecoin price rebound.
FTX Exchange Crash and LTC’s Resilience
In November 2022, the crypto world witnessed the FTX Exchange crash, which caused Litecoin’s price to plummet by 33%, dropping from $73 to $50. Remarkably, LTC demonstrated resilience as long-term investors held onto their assets. The cryptocurrency swiftly recovered, reaching $85 by the end of the year. Recent on-chain data trends suggest that a similar recovery scenario could unfold in 2023.
Long-Term Holder Addresses Reach a New Milestone
On September 10, 2023, the number of long-term holder addresses for Litecoin reached a record high of 5.02 million wallets. This marked an increase of 602,000 addresses since LTC’s price peaked at $114.5 around July 2. During this period, these long-term holders accumulated an additional 3.2 million LTC.
This development mirrors the behavior of Litecoin long-term holders during the FTX crash, when the number of long-held wallets increased by 150,000 between November 6 and December 5. The growth in the percentage of coins controlled by long-term holders, now at 4.5%, is indicative of enduring confidence in the long-term potential of the Litecoin project.
Whale Investors Show Confidence
Apart from long-term holders, Litecoin whales holding substantial balances ranging from 10,000 to 100 million LTC have displayed a renewed sense of optimism. Data from Santiment reveals that these whales paused their selling activities and bought 40,000 LTC in the past two days.
This change is reflected in the cumulative balances of these whales, which increased from 46.63 million to 46.67 million LTC between September 10 and September 12. With current prices hovering around $60, these 40 million coins are valued at approximately $2.4 million. Whale investors are influential players in the crypto market, often able to influence price movements due to their significant holdings.
The Impact on Market Dynamics
Currently, the identified whale cohort controls 56% of the total Litecoin circulating supply of 84 million coins, giving them substantial influence. If they continue to buy at the current rate, they could counter bearish pressure and boost confidence among other investors.
Price Predictions and Key Support Levels
From an on-chain perspective, the $50 support level, which proved crucial during the FTX crash, remains intact. The Exchange On-chain Market Depth confirms this, showing a significant imbalance between buy and sell orders at around $50.
Although there is a buy wall of 296,030 LTC at $55, the possibility of further decline exists if bears overcome this level with their 303,370 sell orders. However, if long-term investors maintain their holdings as anticipated, the 417,870 LTC buy orders at $50 are likely to trigger a rebound.
In the event that bulls gain momentum, a move above the $80 range becomes possible. The 303,370 LTC sell orders at $65 may present initial resistance, but sustained buying from whales could propel LTC towards $80 and beyond.
Litecoin’s recent price drop below $60 has raised questions about its future trajectory. However, the growing number of long-term holders and the renewed confidence of whale investors suggest that the cryptocurrency may be poised for a comeback, mirroring its resilience following the FTX crash in 2022. As always, crypto markets are subject to rapid changes, and investors should exercise caution and conduct thorough research before making any decisions.