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Litecoin (LTC) price drops as miners sell 2 million coins

Litecoin (LTC) price is down 14% from its recent high of $101 on April 18. A mining reserve dump event has sparked bearish fears across the Litecoin ecosystem. How will it affect LTC price movement in the coming days?

As the Litecoin (LTC) community started the 100-day countdown to the next halving event, bull speculators predicted a build-up trend between the two metals. But instead, on-chain data is currently painting the opposite picture.

Miners offload $170 million worth of Litecoin

On-chain data compiled by IntoTheBlock shows that Litecoin miners largely depleted their reserves in a sudden move at the end of April.

As of May 1, the LTC mining reserve is 2.56 million coins. But the graph below shows how miners reduced their balances from 4.53 million LTC to 2.55 million LTC between April 22nd and 23rd.

Miners reserves in Litecoin (LTC). April 2023 Source: IntoTheBlock

A miner’s reserves refer to the amount of cryptocurrency that miners hold and have yet to sell. The sharp decline in mining reserves is often interpreted by investors as a bearish sign because it indicates that miners are selling more of their rewards.

At current market prices of $88, the coins unloaded by the miners are worth approximately $174 million. Holders can expect an imminent price drop if the demand for LTC does not keep pace with the oversupply of the miners in the market.

Crypto whales sit on the sidelines

Interestingly, Litecoin whales with 1,000 to 100,000 coins seem to be taking a hard line as miners flood the market. The chart below shows how whales started selling, just as miners flooded the market on April 23rd.

Between April 23rd and April 28th, they reduced their balances by 340,000 coins worth approximately $30 million at the current market value of $88.

Litecoin (LTC) whale wallet balances.  April 2023.
Litecoin (LTC) whale wallet balances. April 2023 Source: Emotion

Whales are large investors, and typically own at least $100,000 in cryptocurrency. Due to its massive financial power, buying/selling patterns can greatly affect the price of an asset.

As of May 1, the whales as noted above have not made any significant movements. Instead, they held balances close to 22.37 million LTC for the last 5 trading days.

In short, unless the whales move in to get some excess supply issued by the miners, investors can expect the price of LTC to drop in the coming days.

LTC Price Prediction: A bearish reversal towards $80 is likely

Looking at the global in/out money price data around the price, it seems likely that Litecoin price will drop below $80. Although a group of 116,000 wallets with 370m could provide significant support around the $83 mark.

However, if the bearish outlook goes as expected, LTC price may decline until it reaches the more important support level at $77.

Litecoin (LTC) price distribution data IOMAP.  April 2023
Litecoin (LTC) price distribution data IOMAP. April 2023, source: IntoTheBlock

However, if the bulls push the price of LTC above $90, they can invalidate this bearish narrative. But first, they will have to overcome potential selling pressure from 255,000 addresses holding 3.7 million Litecoin.

If they succeed in breaking the $90 resistance, LTC holders can expect the price to rally towards the recent local high of $101.

Disclaimer

In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.

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