Since Litecoin crashed to $40, the altcoin has been trading in a parallel consolidation range within a broader downtrend. Litecoin has held between $40 and $44 for seven straight days, signaling a market at a decision point.
Interestingly, despite prolonged market weakness, Litecoin whale and shark wallets continued to grow.
Litecoin wallets grow despite market weakness
The largest holders of Litecoin have quietly increased their positions despite the prolonged market unfavorability.
According to Santiment, the number of whale and shark wallets, those containing at least 10,000 LTC, jumped 7% in five months. These holdings increased to 648, reflecting increased accumulation by these market participants.
The continued accumulation of these portfolios is vital for a potential market rebound. Historically, they have reinforced the bullish momentum of the market.
At the same time, large players have also tended to attract retailers, a key recipe for a strong market recovery.
Supported by whales and sharks, daily active addresses have remained stable over the months. To the extent that the daily active address hovers around 300,000.
For example, on June 12, Daily Active Address closed at a two-week high of 287,000. This prolonged stability indicates strong market participation.
LitVM Fuels New Market Demand
Santiment Intelligence observed that Litecoin (LTC) is currently experiencing new demand largely driven by LitVM. Through the zkLTC wrapper, LitVM brings smart contract functionality to the Litecoin ecosystem.
Speculation around LitVM has sparked renewed market interest as the community anticipates significant utility for LTC.
For this reason, demand gradually began to recover as buyers stepped in to accumulate. Looking at the supply dynamics of Litecoin, scarcity has increased significantly.
The stock-to-flow ratio indicator hit a monthly high of 278. A high SFR suggests that more LTC has been leaving exchanges rather than entering them, a clear sign of aggressive accumulation.
So as whales and sharks continue to accumulate, demand is reflected throughout the market, especially now with LitVM speculation.
What about LTC?
Despite the expansion of whale and shark wallets, Litecoin remains structurally weak. The altcoin has been trading in a descending channel over the past month, reflecting strong bearish pressure.
The Directional Movement Index (DMI) further validates this bearish market trend. The ADX jumped to 55 while the negative index jumped to 30.
At the same time, the positive index has fallen to 6. When ADX and -DI both rise while +DI falls, it suggests that the downtrend is extremely strong.
Historically, such dynamics have preceded bad price action. So, if current market conditions persist even as whales and sharks pile in, LTC could experience a prolonged sideways move.
However, if speculation around LitVM builds, Litecoin could surpass $44 and aim for $50.
Final summary
- Litecoin whale and shark wallets have continued to grow, increasing by 7% over the last 5 months.
- Despite sustained accumulation, LTC remains structurally weak and could continue to trade between $40 and $44.
