Analytics for ETC, LTC, ETC, SOL, AAVE

  • LTC dropped below its rising channel. 
  • LTC’s price consolidation could persist into the weekend but change early next week. 

Litecoin [LTC] hit rock bottom of $61 in December 2022 but rallied to $93 in January 2023, posting about 50% gains. The January rally followed Bitcoin’s [BTC] impressive performance as it jumped from $16k to $23k. 

At the time of publication, LTC’s value was $87.23, with fundamentals suggesting an almost neutral structure. LTC could fluctuate and consolidate within this range into the weekend before a definitive price action after next week’s FOMC (Federal Open Market Committee) announcement. 

LTC’s uptrend since late December 2022 chalked a rising channel (white). But the bullish momentum faced two key challenges. The first challenge occurred around mid-January after an extended price consolidation temporarily pushed LTC out of the rising channel. The $82.44 support level held the drop and helped LTC recover and retest the channel’s mid-line around the $90 level.  

The second challenge followed after LTC faced price rejection at $92.27, leading to a correction that saw the asset drop below the rising channel. LTC has been fluctuating between $87.23 and $92.27 for the past seven days. The above price consolidation could persist into the weekend and change early next week, depending on how BTC reacts to the FOMC release. 

A likely bullish BTC could see LTC break above the $92.27 level and move back into the rising channel. Such a move could push LTC into the $100 zone. 

But a bearish BTC would see LTC drop below $87.23 and retest the $82.44 support, invalidating the forecast described above. 

LTC’s RSI value was 53 on the 12-hour chart, with possible rejection and rebound from the mid-level of 50 based on historical patterns. Therefore, LTC’s consolidation could continue into the weekend.

As per Coinglass’ data, LTC’s open interest (OI) rates declined around mid-January before fluctuating afterward. However, at press time, LTC recorded a gentle rise in OI, showing that more money was moving into its futures market – a trend that could boost its uptrend momentum. 

On the other hand, price fluctuations cut down holders’ profits. According to Santiment, the 30-day MVRV declined from 20% to 6%; thus, short-term holders’ profits dropped by over 10%. The drop also saw investors adopt a somewhat bearish outlook, as evidenced by the negative sentiment. 

  • SOL could aim at a critical selling pressure zone if BTC aims at $23.3K.
  • SOL’s development activity improved, boosting investors’ confidence.

Solana [SOL] dropped below the $24.33 level after Bitcoin [BTC] fell to $22.5K. SOL bulls found a steady hold at $23.81 and tried to launch a recovery. 

At press time, SOL’s value was $23.92, while BTC struggled to hover above the $23K zone. However, BTC could aim at $23.3K and pull SOL to this crucial supply zone. 

Bitcoin [BTC] dropped to $22.5K but rebounded to $23.0K at press time. A move toward the $23.3K level could tip SOL bulls to target the selling pressure zone (red) of $25 in the next few hours. But bulls must clear the hurdle at $24.33 to move upwards. 

Alternatively, bears could overwhelm the market and push SOL below the immediate support level of $23.81. Such a drop would invalidate the above bullish bias.

Besides, the Relative Strength Index (RSI) was below 50-equilibrium as trading volumes declined, which could further give bears more leverage to devalue SOL in the short term. 

But such a downtrend could settle at $23.21 and offer bulls another chance to inflict a recovery. Therefore, investors should track BTC price action to gauge whether bears or bulls will reign in the next few hours. 

SOL’s development activity increased, boosting investors’ confidence

As per Santiment data, SOL’s development activity registered a further increase at press time. The rise followed a sharp drop the previous day, which coincided with a price decline. Therefore, the rising development activity could boost SOL’s value in the short term. 

In addition, the overall rise in of development activity on the network saw investors’ confidence improve, as evidenced by a retreating weighted sentiment from the negative territory. The improved investor sentiment could further bolster SOL’s value. 

However, the trading volumes had dropped significantly and showed no sign of recovery at press time. As such, it could undermine trend reversal and strong uptrend momentum, delaying bulls from bypassing the $24.33 hurdle. But a bullish BTC could improve the trading volumes, thus worth tracking the king coin’s performance. 

  • AAVE’s uptrend was slowed and forced into a range. 
  • Price/Open Interest divergence could undermine further short-term uptrend momentum.

Aave [AAVE] has been in price consolidation since mid-January. Similarly, Bitcoin [BTC] has been trading sideways within the $22.4K – $23.3K range. 

The king coin’s price action has forced most altcoins into a similar trading range. AAVE’s price range has curved out critical supply and demand zones, offering swing traders profit levels. But everything could change by early next week due to the FOMC announcement. 

At press time, AAVE’s price was $86.4, as bulls seemed psyched to deal with this key supply zone. 

AAVE has been oscillating between $80 and $90 since mid-January, forming critical supply and demand zones on either end.

On the 12- hour chart, the RSI was 61, indicating that AAVE was still bullish and could attempt further upward movements. Similarly, the Money Flow Index (MFI) rose sharply, indicating that accumulation was ongoing. 

But AAVE was approaching the supply zone at press time. Therefore, short traders could offload their holdings at the zone to lock in short-term gains. This could make AAVE drop lower to $84.5 or the demand zone below $80. 

AAVE’s sideways structure may last until BTC’s strong price action after next week’s FOMC meeting. A bullish BTC will push AAVE to break above the range and target the pre-FTX level of $96.4 and the $100 zone. 

However, a break below the demand zone ($76 – $80) would invalidate the above bias. Such a downtrend could settle at $73.2. 

AAVE recorded price/OI divergence, but sentiment remained positive

According to Santiment, AAVE’s weighted sentiment dropped with declining prices but remained positive. Besides, AAVE’s recorded an impressive development activity that has risen incredibly since 20 January. The growth could boost investors’ confidence in the asset and increase its value in the long term. 

However, as prices fluctuated, AAVE’s open interest (OI) rates declined from January 18. The trend indicates a price/OI divergence that could weigh down AAVE’s uptrend momentum. 

Therefore, the conflicting growth metrics could point to a continuance of the sideways structure before a definitive price action next week. 

  • Ethereum Classic traded within a range. 
  • Range highs and range lows could be key over the next few days.

Bitcoin continued to consolidate around the $23k area. While it has a bullish bias, a dip toward $22.4k can not be ruled out. Ethereum Classic also has a higher timeframe bullish bias. Yet, in the near term, only three levels mattered.

Bulls and bears skirmished at the range boundaries, and a breakout toward $26 was not yet in motion for ETC. Once this occurs, bulls can look to buy a retest of the range highs. In the meantime, traders can look for opportunities within the range.

Ethereum Classic traded within a range from $20 to $23.88, with the mid-point at $21.94. Marked in orange, these are the three levels that have been important over the past two weeks. Lower timeframe traders can look to long a revisit of the range lows, and short a test of the range highs.

Sometimes trading and analysis can be extremely simple, and this was one of those times. Although Ethereum Classic has a higher timeframe bullish bias, the price action of the past two weeks indicated consolidation. We can not be certain of a breakout past $24 or a reversal beneath $20 yet.

The 4-hour RSI stood at neutral 50, and the CMF was at zero. Neither indicator showed any favor to the bulls or the bears as ETC traded at the mid-range mark at the time of writing. Taking a position, long or short, at this level could be risky without significant momentum and volume on the lower timeframes such as 1-hour or lower.

On the daily timeframe, ETC flipped the market structure to bullish after breaking above the lower high at $16.75. It surged above $18.45 on January 4 and retested the same level as support a day later. Therefore, despite the two-week range it currently traded within, the bias would remain bullish until ETC slipped back below $19.5.

Meanwhile, the futures market saw a fall in Open Interest. This has been a steady feature in the past ten days. Even when ETC bounced from the lows at $20 on January 19, OI did not register sizeable gains. This indicated weak bulls, and the next step could be emboldened bears. A rise in OI alongside a drop below $20 could precede a flip to bearish dominance.

On January 24, ETC fell from $22.42 to reach $20.56 within a 4-hour trading session. This session saw $1.7 million worth of long positions liquidated. At press time, the bulls wrestled with the $21.94 level. The long positions being liquidated may be followed by an ascent back to the range highs.

2023-01-28 04:57