Litecoin is facing a major obstacle in its price recovery, according to on-chain data analysis. A significant amount of resistance lies ahead for LTC, as highlighted by Trader Kamikaze using data from IntoTheBlock. The analysis reveals that a large number of Litecoin investors purchased their coins at levels just ahead of the current price point. Specifically, around 432,070 addresses bought approximately 6.67 million LTC in the $81.64 to $83.88 range, totaling over $534 million at the current exchange rate.
This concentration of investors in a specific price range could impact Litecoin’s price movement upon a retest. The cost basis for holders is crucial in determining their reaction to price fluctuations. Investors who bought in this thick range may be more inclined to react to a retest, depending on whether they are in a profitable position or facing losses. Those in profits may choose to hold or even buy more, expecting the price to rise further. On the other hand, investors in losses may be more inclined to sell, especially if the price is approaching their break-even point.
The level of support or resistance at a particular price range is influenced by the number of investors who share that cost basis. In this case, the large number of Litecoin investors within the $81.64 to $83.88 range could create a significant supply wall, potentially hindering LTC’s recovery. If Litecoin attempts to retest this level, it is possible that a selling reaction could occur due to the concentration of investors with a cost basis in this range.
As Litecoin is currently trading around $80, just below the supply wall, the cryptocurrency’s price movement in the near future will be crucial. The reaction of investors within the identified price range could impact Litecoin’s ability to recover and break through the resistance ahead. Whether the supply wall acts as a barrier to LTC’s price rise remains to be seen, as investors closely monitor the market dynamics. With the potential for a strong selling reaction upon a retest of the identified range, Litecoin’s price recovery may face significant challenges in the short term.
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