- Litecoin remains the top cryptocurrency for transactions on BitPay in July, continuing its year-long dominance.
- Litecoin’s derivatives market has contracted despite a recent price recovery, signaling cautious investor behavior.
In the latest BitPay report for July, Litecoin (LTC) has once again emerged as the most commonly used cryptocurrency for transactions. This marks another month for LTC, where it has remained the market leader, the number one for the entire year. This is evidence that Litecoin remains the crypto community’s preferred digital asset for transaction purposes.
Litecoin has made a significant comeback, which has been especially apparent over the past few days. From a high of $71, the cryptocurrency has fallen to around $50 over the past week but has since recovered.
Over the past day, LTC has ranged between $56.60 and $58.1. Litecoin has seen its price drop by 2% over the past 24 hours, now trading at $58.07. This decline extends a week-long downward trend, with the cryptocurrency suffering a 17% loss from $71.27.
Bearish Sentiment in Litecoin Market Metrics
In addition to price declines, LTC’s market indicators point to a bearish trend, more so than other cryptocurrencies. According to the data, the trading volume of LTC has increased by 38% within a week as traders respond to the price fluctuations. However, the overall tone is still bearish, and one can only expect further pressure on the cryptocurrency.
The trading volume in Litecoin futures has significantly dropped from over $600 million in April to about $180 million in August. This drastic reduction in speculative trading activity indicates that Litecoin traders are losing confidence in the cryptocurrency. Low open interest levels are usually associated with weak market sentiment and may indicate a continuation of the downward trend.
Funding rates for Litecoin have been volatile. However, positive funding rates saw an increase in late July and early August, which is a sign of some bullish sentiment. However, these rises might not be enough to reverse bearish trends as the market environment remains rather negative for Litecoin.
Examining Wallet Distribution and Whale Activity
Breaking down the wallet distribution shows the tendency of different behaviors among various categories of litecoin holders, which in turn can have an impact on the future price of litecoin. Wallets with 1,000-10,000 LTC have displayed moderate volatility with a marginally bearish trend, suggesting a degree of consolidation among smaller investors.
On the other hand, wallets with between 10,000 and 100,000 LTC have shown high volatility with some accumulation in recent times. This indicates that the medium-sized holders are probably buying at the current low prices in preparation for a possible future rebound.
However, the most alarming dynamics are those wallets that contain 100,000 to 1,000,000 LTC. These large holders, commonly known as “whales,” have recently been selling off many Litecoins. This sell-off implies that large investors are bearish, which may worsen the situation. As highlighted in our previous article, Litecoin reached 62 million transactions in the first seven months of this year and is expected to surpass last year’s total of 67 million transactions by the end of August.
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