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- Litecoin slipped below a key ascending trendline but selling volume stayed weak.
- Spot demand fell as retail traders dominated while larger investors stayed cautious.
- Derivatives traders leaned bullish with rising funding rates, hinting at rebound potential.
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Litecoin (LTC) slipped below an important ascending trendline on the daily chart, sparking concerns about a potential shift in market structure. For weeks, the trendline had acted as strong support, rejecting several bearish attempts. While the latest breakdown does not fully confirm a bearish reversal, it injects caution into the short-term outlook for traders.
Momentum Indicators Suggest Possible Recovery
Momentum signals offered a nuanced picture. The Stochastic RSI recently bounced from oversold levels at 31, a technical move that often precedes short-term recovery rallies. However, despite this potential bullish hint, spot market activity showed little confirmation.
Spot Buy Volumes remained subdued, with Hyblock Capital data revealing that most trades were clustered around $293K. On Binance, spot buying fell by $281K, underscoring weak demand. Retail traders appeared to dominate activity, while larger investors stayed on the sidelines awaiting clearer signals.
Derivatives Traders Turn Bullish
Interestingly, derivatives market data told a more optimistic story. According to CoinGlass, LTC Funding Rates rose steadily over the past week, indicating that leveraged traders are positioning themselves for a rebound. This bullish tilt in derivatives stands in contrast to the lack of conviction in the spot market.
The divergence suggests that while long-term investors remain cautious, speculative traders see opportunity in the latest dip. With the Stochastic RSI flashing a rebound, sentiment may be slowly turning in favor of the bulls.
Also Read: Litecoin Price Outlook – Why $180 Could Be Just the Beginning for LTC in 2025
Outlook: Fake-Out or True Breakdown?
For now, Litecoin’s market structure remains at a crossroads. The breakdown below the ascending trendline is a red flag, but without stronger selling volume, it may prove to be a temporary fake-out. If Funding Rates continue climbing and momentum holds, LTC could stage a rebound and reclaim its trendline support.
Until then, traders should keep an eye on buy volumes and RSI strength to determine whether Litecoin is gearing up for a bounce or preparing for deeper downside.
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Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
