Despite the increase in the number of Litecoin [LTC] transactions exceeding $100,000 since the beginning of the year, the gradual decline in the alt’s Open Interest in the last week suggested that pessimistic sentiment was returning to the market.
According to data from the on-chain analytics platform Santiment, the number of LTC transactions exceeding $100,000 has climbed by 75% since the start of the 2023 trading year.
LTC’s price has increased by 23% since January 1 due to a statistically significant positive link with the top coin Bitcoin [BTC], according to CoinMarketCap data.
LTC’s Open Interest increased by 8% between January 1 and January 12. When the Open Interest for cryptocurrency assets rises, it indicates that more people are putting into contracts or positions to buy or sell the cryptocurrency. This could signal increasing cryptocurrency trading activity and market interest.
However, in the previous week, LTC’s Open Interest has dropped to the level it closed at in 2022 as of this writing. LTC’s Open Interest was $341.27 million, according to Coinglass.
Despite a slow fall in LTC Open Interest, a few on-chain measures revealed that bullish belief in the LTC market remained.
LTC financing rates on top cryptocurrency exchanges Binance and DyDx have been positive in the recent week, according to Santiment statistics.
When the interest rate paid to individuals holding short positions in a crypto asset is higher than the interest rate collected by those holding long positions, the asset has positive funding rates.
This occurs when there is a great demand. A positive financing rate suggests that the market believes in the cryptocurrency’s potential and future price increase.
Furthermore, according to Santiment statistics, LTC’s weighted sentiment has been notably positive since the beginning of the year. This year, whenever market mood has turned negative, it has been promptly replaced by positive investor emotion, indicating that bullish conviction has outweighed bearish conviction. LTC’s weighted sentiment was 0.79 at the time of publication.
The price chart movement suggested that buying momentum remained strong. The alt’s Relative Strength Index (RSI) was 71.75 at press time, indicating that it was oversold. Likewise, its Money Flow Index (MFI) was recorded as 76.70.
Finally, LTC’s Chaikin Money Flow (CMF) dynamic line (green) was distant from its centre line in the positive zone. The CMF was 0.19 at the time of publication. When the CMF indicator for an asset is positive, it indicates that money is pouring into the asset, indicating bullish sentiment and a market uptrend.
