NOIDA (CoinChapter.com) — Litecoin (LTC) has experienced a notable decline in recent weeks, closely mirroring Bitcoin’s six-day downtrend since October 30. However, LTC’s downward trajectory began earlier, around Oct. 20. As of Nov. 4, 2024, LTC is trading at approximately $65.33, reflecting a 2.83% decrease over the past 24 hours.
The decline aligns with a broader market correction, with the global cryptocurrency market cap decreasing by 1.7% to $2.24 trillion.
On-Chain Metrics Indicate Bearish Sentiment
Recent on-chain data underscores a bearish outlook for LTC. The Age Consumed metric, which tracks the movement of previously dormant tokens, has shown increased activity since late October.
Litecoin Age Consumed index. Source: SantimentThis suggests that long-term holders are potentially moving their assets to sell, thereby increasing market supply and exerting downward pressure on prices.
Additionally, the Network Realized Profit/Loss (NPL) metric has recorded significant negative values, indicating that many LTC holders are selling at a loss.
LTC network realized profit/loss.Such behavior often reflects panic selling or capitulation, contributing to further price declines.
These on-chain indicators and the recent price action suggest that LTC may soon face continued bearish pressure. Moreover, traders would likely factor in the impact of the US elections on Bitcoin and other tokens, which would likely result in a decline in the number of buyers entering the market.
LTC Price Forms Bearish Pattern
Meanwhile, LTC price has formed a bearish technical pattern, the ‘descending triangle,’ which could spell more bearish pressure for the LTC USD pair.
The LTC USD pair formed a bearish setup with a 59% downside target. Source: TradingviewAnalysts identify the descending triangle as a bearish continuation pattern, characterized by a descending upper trendline that compresses price action into lower highs, while a flat lower trendline provides weakening support.
This setup intensifies selling pressure as rallies struggle to breach resistance, leading to progressively weaker buyer attempts. The battle between bulls and bears typically ends with a breakdown below the lower trendline.
Traders estimate the potential downside by measuring the vertical distance from the highest point of the triangle to the flat support line, projecting this distance downward from the breakout point.
LTC’s price has dipped below the pattern in the past, briefly indicating a bearish breakout. However, bulls managed to push the price back within the pattern, raising the possibility of a bull trap.
If Litecoin price confirms the pattern, the token could drop more than 59%, with a target near $27.
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