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Attractive valuations?
Litecoin, like most altcoins, has seen a massive price increase. It soared from $125 to over $400 near the start of 2021 before falling to where it is currently, trading below even its early-2021 levels of $144.
There does appear to be a light at the end of the tunnel, though.
Litecoin appears to be forming a descending wedge on the charts, and a break above the upper resistance trendline might trigger a strong surge. That is, assuming the market as a whole behaves correctly. It is, in reality, well-positioned, with the RSI at 50 and a close only millimetres above the 50-day moving average.
Fundamentally, it appears to be a good contender for a comeback. The BitMEX basis ratio of LTC has been somewhat favorable. This implied that Futures had a price advantage over spot prices. It goes on to say that futures traders and investors have remained positive about the altcoin's prospects thus far.
Bitmex Basis Ratio | Source: Santiment
Litecoin's perpetual futures financing rates have remained positive on exchanges including Binance, BitMEX, and FTX, confirming the previous conclusion.
This suggests that long-term derivatives traders are willing to pay the difference in order to keep their positions open.
Litecoin’s on-chain Daily Active Addresses have remain fairly steady too, despite the fall in prices since November of last year. This is a sign that users on the network still trust and have faith in it over the long run.
Daily Active Addresses | Source: Santiment
Concerning signals
However, not everything appears to be going well for this altcoin. On the chart, Santiment's Adjusted Price DAA Divergence tool flashed a big sell signal.
A short-term correction may be expected based on the magnitude of the most recent red bar on the chart.
Ergo, the overall picture seems quite optimistic for Litecoin going ahead. A gradual accumulation as you go along, with buying the dips, could be the best strategy for this altcoin.
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