Litecoin (LTC) Holders Incur Losses Regardless of Breakout

Litecoin (LTC) marked a bullish milestone yesterday by closing above its falling wedge sample, a formation during which the altcoin had been buying and selling

Litecoin (LTC) price action marked a bullish milestone yesterday with a closure above its falling wedge pattern, a formation during which the altcoin had been trading since March 31. This breakout signaled a surge in buying pressure, but surprisingly, traders who took advantage of the rally by selling their holdings incurred major losses.

Source: TradingView

Litecoin Holders Incur Losses Despite BreakoutA falling wedge pattern is characterized by an asset’s price trending between two downward-sloping trend lines, with the upper trend line acting as a resistance level and the lower trend line serving as support. Litecoin’s price had been confined within this pattern since March 31, leading to a 27% decline up till the breakout.

A breakout above the falling wedge is usually considered a bullish sign, indicating that buyers are overpowering sellers and that the price may be poised for an upward trend.

However, on-chain data reveals that some market participants who capitalized on the breakout by selling their holdings incurred substantial losses yesterday. This insight is derived from the coin’s Network Net Realized Profit/Loss (NPL) metric, which dipped to -5.25 million yesterday.

The NPL metric tracks whether the holders of an asset across its total network are selling at a profit or loss. When the metric’s value drops significantly, as noticed in Litecoin’s case, it signifies that, on average, holders are realizing losses on their investments.

This suggests a bearish market sentiment, with traders likely panic selling and experiencing capitulation.

The above is the detailed content of Litecoin (LTC) Holders Incur Losses Regardless of Breakout. For more information, please follow other related articles on the PHP Chinese website!