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![Litecoin [LTC]: What does this metric tell us about miners’ incentive to sell](https://cryptonoiz.com/wp-content/uploads/2022/09/litecoin-3344682_1280-1000x600.jpg)
Litecoin (LTC)’s bullish exercise has risen for the reason that begin of the month. It managed to get better again above $60 after ending August on a bearish be aware. Quite the opposite, nevertheless, new observations appear to point that it may be about to expertise one other slip under the $60-level.
Litecoin is without doubt one of the few cryptocurrencies that operates on a proof of labor consensus mechanism. Miner flows have thus far proved to be a major sentiment driver influencing value motion. Any incentive for miners to promote would thus act as a helpful indicator of potential incoming bearish stress.
The Puell a number of is without doubt one of the indicators which will assist establish cases the place miners are incentivized to promote. This, as a result of the metric signifies the extent of miner profitability at any given level.
Litecoin’s Puell a number of simply concluded final week with an uptick to its highest worth within the final 30 days.
Supply: Glassnode
The excessive Puell a number of for LTC indicated that miner profitability is at present excessive and this may increasingly encourage them to promote.
Litecoin’s dormancy has additionally been close to the decrease month-to-month vary, with the identical registering some exercise within the final 3 days. Apparently, this coincided with a resistance degree retest after final week’s rally.
Supply: TradingView
Litecoin’s 4-hour chart highlighted one more reason for a possible upcoming retracement. It briefly turned overbought after a strong bull run within the final 4 days. Moreover, the MFI indicator urged that it has already been seeing some promote stress.
LTC’s on-chain metrics additional validated the growing promote stress expectations.
The MVRV ratio has kicked off the brand new week on a pivot, confirming that profit-taking is occurring. It additionally appeared to disclose lowered profitability for patrons coming into the market close to the current prime.
Supply: Santiment
The sharp drop within the realized cap metric is affirmation {that a} substantial quantity of shopping for stress is happening close to the current prime.
Conclusion
The aforementioned Litecoin-centric observations highlighted the potential for a sizeable short-term retracement in the direction of the beginning of the week. Merchants must also contemplate opposing potential outcomes, such because the probability that the brand new week might carry forth a bullish sentiment shift. This may delay any potential draw back, giving strategy to the bulls.
Litecoin’s newest uptick has thus far demonstrated friction close to the $64 short-term help. This may be seen as proof that LTC won’t be prepared for a breakout on the charts.
