- Litecoin rose 6.52% in 24 hours to hit a three-month high.
- As demand for the altcoin grew, LTC broke out of a descending channel.
Over the past day, Litecoin [LTC] has made a strong price upswing, rising from a local low of $83 to reach a monthly high of $91.
Since hitting these levels, it has slightly retraced on one-hour timeframe. As of this writing, Litecoin was trading at $89. This marked a 6.52% increase over the past 24 hours.
Over the same period, the altcoin recorded a 31% increase in its volume, hitting $509.5 million.
The surge in volume while prices are increasing indicates rising demand, with buyers entering the market to accumulate the token.
As such, traders have been actively accumulating LTC over the past week, signaling growing confidence with the altcoin.
Source: IntoTheBlock
This accumulation is evidenced by a massive drop in Litecoin’s flow into exchanges. Over the past three weeks, total flows to exchanges aggregated has declined to hit a three-month low.
Such a significant decline suggests that inflow into exchanges were declining, reflecting accumulation behavior.
Source: IntoTheBlock
This behavior is even more dominant among LTC whales. As such, the large holder’s netflow to exchange ratio has declined sustainably over the past three weeks to hit a three-month low.
This implies less selling activity by Litecoin’s large holders.
Thus, large holders are accumulating more than they are selling, with a positive capital inflow of 116.8k LTC.
Source: Santiment
This trend is further evidenced by the surge in Litecoin’s scarcity. Looking at the altcoin’s stock-to-flow ratio, it has spiked over the past day to 306.
Such a rise in SFR indicates a higher scarcity, with less LTC available for immediate selling.
Often, increased scarcity while demand rises or remains constant is a recipe for higher prices.
With such massive demand, the question is whether the altcoin can hold onto these gains for a sustained uptrend.
Is Litecoin finally ready to rally?
According to AMBCrypto’s analysis, Litecoin was experiencing strong demand at press time, with buyers starting to take over the market. The prevailing market conditions could position LTC for more gains.
Before this price pump, the altcoin had been trading within a week-long ascending pattern inside a multi-month descending channel.
With the recent price upswing, Litecoin has broken through the descending channel and was retesting it at press time. A successful retest will see the altcoin make a major move to the upside.
Source: Tradingview
Looking at Litecoin’s MACD, it has risen to 1.2 since making a bullish crossover two weeks ago.
The continued rise suggests that the altcoin is experiencing strong upward momentum, closing higher highs on daily charts. With the momentum strengthening, it positions the altcoin towards a successful retest.
Therefore, if the current demand holds while the upward momentum continues to hold strong, the altcoin could successfully retest the latest move and make a move to $96.
However, if the attempt by bulls fails, a pullback will see Litecoin drop to $83.
