Litecoin (LTC) Holders Incur Losses Despite Breakout Above Falling Wedge Pattern

Litecoin (LTC) marked a bullish milestone yesterday by closing above its falling wedge pattern, a formation in which the altcoin had been trading since March 31.

Litecoin (LTC) price action closed above a crucial technical formation on May 11, sparking a buying climax that typically leads to an upward price trend. However, on-chain data reveals that traders who sold their holdings despite the breakout incurred major losses.

Litecoin price marked a bullish milestone on Wednesday by breaking out of a falling wedge pattern, a formation that had contained the altcoin's price action since March 31.

This breakout signaled a surge in buying pressure, indicating that buyers were largely outnumbering sellers and that the price was likely to continue trending upward.

However related Reading: Litecoin (LTC) Breakout Imminent, But Chart Reveals a Glaring Weakness

A 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 for the past 42 days.

During this period, the altcoin had experienced a 27% decline from its upper trend line resistance at the beginning of April, eventually breaking out of the pattern on Wednesday. A breakout above the falling wedge is usually considered a bullish signal.

However, despite the breakout signaling a buying climax and suggesting that traders who sold their holdings experienced major losses, some market participants may have sold theirLTC holdings at a loss yesterday. This insight is highlighted by the coin’s Network Realized Profit/Loss (NPL) metric, which dipped to -5.25 million yesterday.

The NPL metric tracks whether the holders of an asset across its entire network are selling at a profit or loss. When the metric’s value drops significantly, as observed in Litecoin’s case, it indicates that on average, holders are realizing losses on their investments. This suggests a bearish market sentiment, with traders potentially panic selling and experiencing capitulation.

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