Litecoin (LTC/USD) has been experiencing a prolonged downturn in recent weeks, but a leading cryptocurrency analytics firm, Santiment, believes a bullish sentiment could be on the horizon for the Bitcoin (BTC/USD)-inspired token.
Santiment noted a substantial 36% decline in Litecoin’s market value since its peak in April. However, the firm observed a surprising trend: while small traders, those holding between 0.1 and 1 LTC, continued to increase during this period, there was a dramatic drop of 45,200 wallets in this cohort. This indicates that small traders might be finally capitulating on the proof-of-work cryptocurrency.
Santiment highlights that such a sudden liquidation of small traders often serves as a sign of an impending bullish turnaround for an asset. This suggests that despite the recent downturn, Litecoin could be poised for a reversal.
Litecoin, forked from Bitcoin, was one of the earliest altcoins in the market and is often referred to as “the silver to Bitcoin’s gold.” It stands out among cryptocurrencies for being one of the few that have evaded a “security” probe by U.S. regulators. Furthermore, Litecoin is the most used cryptocurrency for payments, according to BitPay, the world’s largest crypto payment service provider.
Despite these fundamental advantages, Litecoin’s market valuation has not seen significant growth. As of this writing, Litecoin is one of the few billion-dollar capitalization tokens with year-to-date losses, totaling 13%. In contrast, Bitcoin has surged 48%, Ethereum (ETH/USD) has grown 17%, and Solana (SOL/USD) has seen a 54% increase.
However, Santiment’s analysis suggests that Litecoin’s current market downturn could be a temporary situation. Investors and traders should closely monitor Litecoin in the coming weeks, as it could be on the verge of a turnaround.
At the time of writing, Litecoin was trading at $80.97, down 0.19% in the past 24 hours.
