Could the Strong Sell-Pressure from Miners Cause LTC to Drop Below $80?

    LTC on-chain analysis shows that miners have recently reduced their LTC holdings. Could this cause LTC to lose the $80 support level once again?

    Litecoin (LTC) leverages the uniqueness of blockchain technology to provide secure and low-cost cryptocurrency payments. However, miners on the Litecoin network are currently reducing their reserves of LTC.

    Accordingly, Litecoin miners have recently sold off majority of their LTC holdings. From March 11 to March 27, they sold nearly 1.1 million tokens worth $100 million.

    Amount of Litecoin (LTC) held by miners in March 2023 (Source: IntoTheBlock)

    Miners selling their tokens is often seen as a bearish signal. It shows the possibility of an oversupply of the asset in the market. This increased selling pressure could cause the LTC price to drop in the coming weeks.

    Litecoin is at an overbought level

    The Network Value to Transactions (NVT) indicator’s recent spike on the Litecoin network confirms a bearish possibility for LTC. Santiment calculates the NVT ratio by dividing the coin’s market capitalization by its daily trading volume. As described below, the NVT rate gradually increased, from 6.70 to 9.33 between March 11 and March 28.

    Litecoin (LTC) Network Value to Transactions (NVT) in March 2023 (Source: Santiment)

    The Litecoin network’s increased NVT ratio signals an imminent price drop as the underlying asset is currently overbought. In conclusion, with such a high NVT ratio, if Litcecoin miners maintain the current selling bias, LTC holders can expect an extended pullback in the coming weeks.

    Is $80 the next stop?

    According to Exchange Market Depth data from IntoTheBlock, Litecoin will most likely drop below $80. This indicator depicts the main buy and sell zones based on limit orders being placed by Litecoin traders on exchanges.

    As seen below, LTC is likely to decline until it approaches the $80 zone, where 4.37 million buy orders could provide support. Yet, if that buy momentum fails to hold, LTC could drop further towards $71, where traders are placing buy orders for 7.5 million LTC.

    Litecoin (LTC) Exchange Market Depth data in March 2023 (Source: IntoTheBlock)

    However, the trend could reverse if Litecoin rises above the $90 zone. To do this, LTC has to break through a resistance level where there are 7.16 million pending sell orders. If successful, the LTC price is likely to rise to $100.

    Disclaimer: This article is for informational purposes only, not investment advice.

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