Since Litecoin crashed to a low of $40, the altcoin has traded within a parallel consolidation range within a broader downtrend. Litecoin has held between $40 and $44 for seven consecutive days, signaling a market at a decision point.
Interestingly, despite the extended market weakness, Litecoin whale and shark wallets have continued to grow.
Litecoin wallets expand despite market weakness
Litecoin’s largest holders have been quietly growing their positions despite the prolonged market unfavorability.
According to Santiment, the number of whale & shark wallets, those holding at least 10K LTC, has surged by 7% in five months. These wallets climbed to 648, reflecting increased accumulation from these market players.
The continued accumulation from these wallets is vital for a potential market rebound. Historically, they have strengthened the market’s upside momentum.
At the same time, large players have also tended to attract retailers, a key recipe for a strong market recovery.
Backed by whales and sharks, Daily Active Addresses have held steady for over the months. Inasmuch, Daily Active Address has hovered around 300k.
For instance, on the 12th of June, Daily Active Address closed at a two-week high of 287k. This extended stability indicated strong market participation.
LitVM fuels fresh market demand
Santiment Intelligence observed that Litecoin [LTC] is currently experiencing fresh demand largely driven by LitVM. Through the zkLTC wrapper, LitVM brings smart contract functionality to the Litecoin ecosystem.
The speculation around LitVM has sparked renewed market interest, as the community anticipates meaningful utility for LTC.
For that reason, demand has gradually started to recover, with buyers stepping in to accumulate. Looking at Litecoin’s supply dynamics, scarcity has jumped significantly.
The Stock-to-Flow Ratio metric jumped to a monthly high of 278. Elevated SFR suggests more LTC has flowed out of exchanges than into them, a clear sign of aggressive accumulation.
Thus, as whales and sharks continue to accumulate, demand is being reflected across the market, especially now with LitVM speculation.
What’s it about LTC?
Despite the expanding whale and shark wallets, Litecoin remains structurally weak. The altcoin has traded within a descending channel over the past month, reflecting strong bearish pressure.
The Directional Movement Index (DMI) further validates this market bearishness. ADX surged to 55 while the negative index jumped to 30.
At the same time, the positive index dropped to 6. When ADX and -DI both rise while the +DI drops, it suggests the downtrend is extremely strong.
Historically, such a momentum setup has preceded poor price actions. Thus, if prevailing market conditions persist even as whales and sharks accumulate, LTC could see extended sideways movement.
However, if speculation around LitVM strengthens, Litecoin could breach $44 and target $50.
Final Summary
- Litecoin whale and shark wallets continued to expand, rising 7% over the past 5 months.
- Despite sustained accumulation, LTC remains structurally weak and could continue to trade between $40 and $44.
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