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Why the Litecoin (LTC) price remains stagnant despite wide use

In this post:

  • Litecoin sees significant turnover, moving up to 60% of its supply in a single day. 
  • LTC prices stagnated, with short positions dominating on most exchanges.
  • Miners keep their activity at an all-time high, not capitulating despite low LTC prices.

Litecoin (LTC) is still among the most reliable assets for payments and worldwide trading. But the coin has been passed for rising to a higher range during the 2024 bull market. 

Litecoin’s network is extremely active both in terms of transactions and value transfers. In a single day, between 42% and more than 60% of the entire supply of LTC has changed hands. Litecoin’s chain has generated more than 74M coins, with around 10M left to be mined. 

Also Read: Can altcoins gain ground as Bitcoin dominance weakens?

On some days, more than 52M LTC change hands, in addition to having a large percentage of coins sitting in idle wallets. Currently, the Litecoin network carries a similar transaction count to the Ethereum testnet, and can compete even with Solana or Toncoin. 

Additionally, LTC seems to have established itself as a leader on Bitpay, the crypto payment service with the largest mainstream adoption. 

The recent statistics of Litecoin once again raise the question of why the LTC price is stagnant, falling in both USD terms and against Bitcoin (BTC). The verdicts range between overly-optimistic expectations of a big rally, or an admission that LTC will never rally. 

The most common prediction is for LTC to await another active bull market before rising as high as $1,000. The exact timing of the rally also varies between immediate and awaiting the next Litecoin halving.

LTC among top coins based on holders

LTCs are spread across 8M known wallets, based on organic growth and distribution in the past decade. Since LTC is a simple coin, it is not tied to other projects or tokens. 

LTC has a clear-cut use as a means of payment, and has stayed behind meme narratives. Technologically, the Litecoin network can carry Ordinals, but the NFT use case was also limited. 

Also Read: Litecoin Price Prediction for July 2024: Experts Think Robot Trading Algotech Platform Will Go Higher Than LTC 

For those reasons, the Litecoin narrative calls back to older periods in the crypto market. Whale activity has been watched closely for signs of inflows. Otherwise, the Litecoin narrative has no hyping mechanisms from influencers. The Litecoin Foundation has also been relatively quiet, mostly focusing on developing the underlying technology. 

The recent whale transfers usually signal a readiness to sell, but the main reason may not be to lock in profits. 

Low fees and acceptance means LTC may be used to generally transfer value to new markets. This use case for LTC is similar to the utility of DOGE as a cross-exchange asset. The relative price stagnation of LTC also means more convenience in carrying funds, without the need to go through stablecoins. 

Fake breakouts boost LTC shorting

One of the big problems for LTC are short-term, fake and small breakouts. This trading pattern helps short traders, boosting short-term pessimism for LTC. 

The most feared proposition is that LTC may turn reluctant traders into losers, or long-term holders. 

In its current price range, LTC is seen as potentially making another breakdown, to remain under $100 for an even longer time. 

The other problem for LTC is that most of its trading is concentrated on Coinbase. LTC has lost exposure to South Korean markets, and relies mostly on a mix of USDT and USD for its liquidity. Overall, LTC sees a predominance of short positions, with an extreme trend to short the asset on Binance and Kraken. LTC has marked higher lows, but has not revisited its peak valuation since the 2017 and 2021 rallies. This has caused pessimistic traders to predict an extreme slide, as low as $5. 

The short positions are also rarely attacked, though some short positions have been exposed in the past week. In the case of Litecoin, it seems the coin has completed most of its development and cannot compete with more actively hyped projects. 

Despite everything, Litecoin miners have not capitulated even at these prices. Litecoin mining is still close to an all-time high, with no sign of a miner capitulation.


Cryptopolitan reporting by Hristina Vasileva

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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