LTC’s Open Interest is down 9% over the past week. Regardless, investors remained optimistic.
Despite the rally in the Litecoin count [LTC] trades in excess of $100,000 since the start of the year, the steady decline in the alt’s Open Interest over the past week signaled that bearish sentiment was returning to the market.
Read Litecoins [LTC] Price Forecast 2023-24
According to data from the on-chain analytics platform Sanitationthe number of LTC trades executed over $100,000 has increased by 75% since the start of the 2023 trading year.
Sharing a statistically significant positive correlation with leading coin Bitcoin [BTC]the price of LTC is up 23% since Jan 1, data from CoinMarketCap revealed.
Between January 1 and January 12, LTC’s Open Interest increased by 8%. When the Open Interest for crypto assets increases, it means that more people are entering into contracts or positions to buy or sell the cryptocurrency. This may indicate increased trading activity and market interest in the cryptocurrency.
However, over the past week, LTC’s Open Interest began a decline to be pegged at the level it closed in 2022 at the time of this writing. According to Coinglass, LTC’s Open Interest was $341.27 million.
Holders are enthusiastic about Litecoin
Despite a gradual decline in LTC’s Open Interest, some on-chain metrics suggested that there was still an upbeat outlook in the LTC market.
LTC funding rates on leading cryptocurrency exchanges Binance and DyDx have been positive over the past week, according to data from Santiment.
A crypto asset posts positive funding rates when the interest paid to those who hold short positions in the asset exceeds the interest earned by those who hold long positions.
This happens when demand is high. A positive funding rate indicates that the market is optimistic about the cryptocurrency’s potential and continued price growth.
Further, LTC’s weighted sentiment has been significantly positive since the start of the year, data from Santiment showed. So far this year, when market sentiment turned negative, it was quickly replaced by positive investor sentiment, indicating that bullish conviction trumped bearish conviction. At the time of writing, LTC’s weighted sentiment stood at 0.79.
Realistic or not, here is the market cap of LTC in terms of BTC
Movements on the price chart showed that the buying momentum remained strong. Oversold at press time, the alt’s Relative Strength Index (RSI) came in at 71.75. Similarly, the Money Flow Index (MFI) was spotted at 76.70.
Finally, the dynamic line (green) of LTC’s Chaikin Money Flow (CMF) was well off the centerline in the positive zone. At the time of writing, the CMF was 0.19. When an asset’s CMF indicator is positive, it suggests that money is flowing into the asset, indicating optimistic sentiment and an upward trend in the market.
This post Litecoin [LTC]: A decline in Open Interest does not mean buyers are ready
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