Will Litecoin recover? Traders seem confident despite recent dip

Key Takeaways

Litecoin dipped below its trendline, yet Funding Rates increased, signaling leveraged optimism. The Stochastic RSI bounced, raising chances that the drop was only a fake-out.

Litecoin [LTC] slipped below a key trendline.

After weeks of holding above an ascending trendline that has held strong and initiated several rejections, LTC broke under this level on the daily chart.

However, that move alone did not confirm a full trend reversal, but it did introduce caution into the short-term outlook.

Source: TradingView

Momentum stuck between signals

Momentum signals were not decisive. The Stochastic RSI just bounced from oversold levels at 31, which normally hints at a short-term recovery.

Having said that, spot buy volumes told a different story.

Spot Buy Volumes barely shifted, highlighting weak demand. Hyblock Capital showed that most trades clustered around $293K in recent days, while Binance Spot Buy Volume fell by $281K, confirming muted interest.

Most of the trading action remained clustered under $1 million, suggesting retail players were doing the heavy lifting while bigger wallets sat on the sidelines waiting for the market direction confirmations.

Source: Hyblock Capital

Derivatives crowd leaned bullish

On the derivatives side, though, things look different.

AMBCrypto’s analysis of CoinGlass data revealed that LTC Funding Rates rose steadily during the past week, suggesting that leveraged traders are leaning bullish despite the spot market’s lack of conviction.

Naturally, with the Stochastic RSI flashing a bounce, sentiment appeared to be shifting, even if price had not fully caught up.

Source: CoinGlass

What’s next for Litecoin?

For now, LTC sent mixed signals. The spot market showed no urgency, but derivatives traders seemed to bet on a rebound.

If Funding Rates kept climbing and RSI momentum held, this dip below the trendline could end up being a fake-out instead of a bearish shift.