Litecoin Sees Sudden Exodus Of Retail Investors: Why This Can Be Bullish
August 27 2024 - 9:00PM
NEWSBTC
On-chain data shows Litecoin has recently seen a sudden exit of
small hands, which can favor LTC’s price. Small Litecoin Investors
Have Been Displaying FUD Recently In a new post on X, the on-chain
analytics firm Santiment discussed the latest shift in Litecoin’s
userbase. A couple of relevant indicators are relevant here: Total
Amount of Holders and Supply Distribution. Related Reading: Solana,
Ethereum Attract Traders Amid Bitcoin Open Interest Plunge The
first of these, the Total Amount of Holders, measures, as its name
suggests, the total number of addresses on the LTC network carrying
some non-zero balance. When this metric’s value goes up, new
addresses with balance are popping up on the blockchain. This
indicates that adoption is taking place, which can naturally be
bullish for the asset. On the other hand, the indicator’s value
decreasing suggests some investors have decided to clear out their
wallets, perhaps in an attempt to exit from the cryptocurrency
completely. Now, here is a chart that shows the trend in the
Litecoin Total Amount of Holders over the last few months: As
displayed in the above graph, the Litecoin Total Amount of Holders
has registered a sharp drop recently, a potential sign that many
investors have decided to leave the asset. While the decrease shows
a departure from the network, the Total Amount of Holders contains
no information about which type of investors are selling here. This
is where the second indicator comes in: the Supply Distribution.
This metric tells us about the total number of addresses currently
belonging to a particular wallet group. In the chart, Santiment has
attached the Supply Distribution data specifically for the
investors with their address balance in the 0.1 to 1 LTC range.
This is a small amount, so the only holders who qualify for this
group would be the smallest of the hands: retail. From the graph,
it’s apparent that the Litecoin addresses falling within this range
have recently seen their number go through a rapid decline. More
specifically, around 45,200 retail addresses have suddenly cleared
themselves out during this plunge. Related Reading: Bitcoin Breaks
$64,000, But This Pattern Could Mean Bull Run Isn’t Safe Given this
trend, it would appear that a good chunk of the decrease in the
Total Amount of Holders has come from these small investors. While
selling itself can be bearish, the fact that the retail holders are
capitulating here may not be so bad. As the analytics firm
explains, “Small fish impatiently ‘jumping ship’ is often a
turnaround sign for an asset to begin turning bullish once again.”
Thus, whether this market FUD would lead to a rebound for
Litecoin remains to be seen. LTC Price At the time of writing,
Litecoin is floating around $62, down more than 4% over the last
seven days. Featured image from Dall-E, Santiment.net, chart from
TradingView.com
Litecoin (COIN:LTCUSD)
Historical Stock Chart
From Aug 2024 to Sep 2024
Litecoin (COIN:LTCUSD)
Historical Stock Chart
From Sep 2023 to Sep 2024