Litecoin Miners Offload $14M in 20-Days: Can LTC Price Reach $70 in August?

Litecoin Price Analysis

Litecoin price fell below $65 on August 23, 2024, after experiencing an 8% decline over the past week. After multiple unsuccessful attempts at breaching the $70 support, bearish trading activity among miners is now signaling further downside potential.

Litecoin Surrenders Gains After Russia Rally

Earlier in August, Litecoin (LTC) experienced a notable price recovery, rallying from a three-month low of $50 on August 5 to a high of $68 by August 18. This was largely driven by the broader market recovery and favorable news from Russia, where new legislation legalized crypto mining.

However, after reaching $68, Litecoin has since retraced approximately 8% over five consecutive losing days, settling around $65 as of August 23.

The failure to sustain momentum above the $70 resistance level is a key factor contributing to the recent price decline. The bullish momentum that propelled LTC to its monthly highs appears to have dissipated, leading to profit-taking among short-term traders. This has created a bearish setup as investors who bought in during the early August rally now seek to lock in gains.

Litecoin Facing Sell-Pressure from Miners

While LTC price has struggled this week, it hasn’t stopped rival coins like BTC and DOGE from booking considerable gains. This signaling that the presence of a unique bearish catalyst within the LTCUSD markets.

A closer look at Litecoin on-chain data reveals bearish trading activity among LTC miners and node validtors may have contributed to laggard LTC price performance this week.

IntoTheBlock’s Miners reserves chart below, tracks real-time changes in LTC balances held by recgonized Litecoin miners and mining pools.

The chart above shows that the Litecoin miners held a total balance of 1.67 million LTC as of August 2. At the time of writing on Aug 23, that figure has rapidly dwindled to just 1.46 million.

Effectively, this reflects that Litecoin miners have sold off 210,000 LTC, (~$14 million) in the last 20-days. When miners make such a large sell-off within a short period, it impacts the asset’s price negatively for two main reasons.

First, the newly-mined 210,000 LTC trickling into circulation dilutes the short-term market supply, increasing sell-pressure as prices approach key support level. More so, a persistent selling trend among highly influential stakeholders like miners could dissuade prospective new entrants from entering the LTCUSD markets in fears of being crowded out.

In summary, this explains why LTC price has failed to break above the critical $70 resistance level, as August 2024 draws to a close.

LTC Price Prediction: Bulls Now Battling to Defend $60 Support

As of August 23, Litecoin is trading near $65, with the bulls fighting to maintain the $60 support level. The LTCUSD daily chart shows two key technical indicators—the Keltner Channel (KC) and the Parabolic SAR—both signaling a bearish trend.

First, the Keltner Channel indicates that Litecoin has failed to maintain its recent upward momentum.

The price has slipped below the middle line of the KC, pointing to a shift in control towards the bears. The upper band of the KC, which corresponds to the $70 resistance level, remains untested, suggesting that this level will likely continue to pose a challenge for Litecoin in the near term.

Second, the Parabolic SAR has flipped above the current price, confirming the bearish trend. This indicator, known for identifying trend reversals, suggests that the downward momentum is still intact. If Litecoin fails to hold the $60 support level, the next significant support zone is likely around $55, aligning with the lower band of the KC.

Litecoin’s recent price action suggests that the $70 level will remain a tough barrier to breach without a strong bullish catalyst. The $60 support is crucial, and a break below it could lead to a more extended downside move, potentially bringing LTC back to the $55-$50 range