Litecoin price was a victim of the latest crash just as was the case for most other cryptocurrencies.
However, it did demonstrate support just below the $98 price zone, raising hopes of a comeback.
Three days have now passed since the crash and its subsequent recovery attempts during which Litecoin demonstrated some accumulation.
However, demand has so far been relatively weak and that was evident a few hours before press time when price failed to break out from a wedge pattern.
LTC in its 1-hour chart has been trading in a wedge pattern with an ascending support indicating a buildup of bullish momentum.
A breakout from this pattern would have confirmed a strong bullish build-up.
LTC price action broke below the support earlier in the day, confirming that demand was not strong enough to fully enter recovery.
The opposite outcome would have likely resulted in a rally towards the $130 price level which is the net major resistance zone.
Litecoin slid all the way down to $100.45 at press time and threatened to slide below $100.
The prospect of more downside was notably high considering that it was not oversold yet on both the 1-hour and 1-day charts at the time of writing.
Can Litecoin Price 3-Month Support Hold?
Litecoin could easily be headed for another retest of its 3-month support near the $97 price zone. It has so far demonstrated strong support within this level.
A dip below this key support could signal further demand erosion and pave the way for more potential downside.
Speaking of downside, LTC spot flows pushed back into the red by $6.59 million in the last 24 hours.
The situation as similar in the derivatives segment where open interest was down by 2.91% to $466.58 million in the last 24 hours.
Derivatives volume also cooled down by 1.73% to 1.15 billion during the same time.
The observations in the spot and derivatives segment confirm that Litecoin is struggling to gain bullish traction.
This reflects the overall market sentiment which has been leaning towards uncertainty despite the sizable discount.
On-Chain Stats Reveal Changing Holder Dynamics
There is no doubt that the latest market turmoil has forced investors to re-evaluate their strategies. This was very clear in the different classes of LTC holders.
Swing traders (cruisers) trimmed their balances from 29.5 million LTC on 1 February to 27.51 million LTC by 4 February.
Traders (short term) were adding to their balances from 8.06 million coins to 9.95 million coins during the same period.
The shift suggests that swing traders do not anticipate a significant shift in the short term. The same applies to short term traders looking to capitalize from the dip.
Meanwhile, HODLer balances grew from 38.63 million LTC to 38.73 million LTC. This means long term holders took advantage and accumulated during the dip.
However, their balance grew by a relatively small margin indicating that they were not scrambling to buy back heavily.
The post Litecoin Price Set for a Comeback: Key Factors Driving Its Rebound appeared first on The Coin Republic.
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