Litecoin (LTC) could be on the verge of a significant price swing, according to John Bollinger, the creator of the Bollinger Bands indicator. This speculation comes after a conversation between Bollinger and an analyst known as Bamboo, who inquired about Bollinger’s insights on LTC’s long-term price chart.
Bollinger Bands Suggesting Breakout
The analysis focused on the monthly chart, showcasing LTC’s price movement since 2014. While the chart confirms a downtrend, with LTC trading at $73.36, a significant drop from its all-time high, the Bollinger Bands themselves are hinting at a potential shift.
Bollinger Bands is a technical analysis tool that measures volatility. Currently, the bands surrounding LTC’s price are noticeably tighter compared to periods of high volatility in 2018 and 2021. Historically, LTC has experienced substantial price increases following similar periods of low volatility.
However, Bollinger advised switching between chart scales (linear and logarithmic) for a more comprehensive perspective. While the linear scale confirmed price consolidation within a narrow range, it also highlighted the middle Bollinger Band acting as a key support and resistance level very close to the current price.
Time for Litecoin to Shine?
Bollinger’s suggestion of a potential breakout is fueled by LTC’s historical price movements following periods of consolidation with narrow bands. Traditionally, a decisive break above or below the Bollinger Bands signals the direction of the next major trend.
“Squeezy, squeezy. About time for LTC to wake up,” remarked Bollinger, emphasizing the possibility of an imminent price surge for Litecoin.
Robust Network Activity Bolsters Bullish Outlook
Supporting the potential breakout narrative is Litecoin’s robust network activity. Data from IntoTheBlock reveals that LTC processed a staggering $2.85 billion in daily large transactions (over $100,000) as of July 12th. This dwarfs the large daily transaction volume of other Layer 1 blockchain like Dogecoin, which sits at around $590 million.
This significant whale activity underscores the active nature of Litecoin’s network and the continued involvement of large investors. Transaction volumes peaked at $3.3 billion between July 5th and 10th before settling around $2.4 billion, indicating sustained high activity levels.
At the time of writing, Litecoin is trading around $73.33, reflecting a slight gain over the past 24 hours and the previous week. With Bollinger’s insights and LTC’s strong network fundamentals, investors are keeping a close eye on whether the cryptocurrency will finally break out of its recent slump.