Litecoin drops 6.5%: Are whale funds and ETFs enough to reverse the trend?

Litecoin records a 6.54% correction on 01/20/2026, extending the aftershock from the cyberattack earlier this month and raising suspicions that the market’s “wounds” of trust may still not have fully healed.

Source: TradingView Notably, interest from institutions and whale accumulation activities continue to show signs of increasing. However, this sharp price slide creates a clear paradox, forcing the market to question: what is the real reason behind Litecoin’s decline, even as large capital flows still seem to bet on long-term prospects?

Litecoin’s decline and ETF capital flows: A contrasting story

Despite the short-term correction in price, Litecoin attracted about $2 million in ETF capital flows last week – a sign that large money confidence remains intact. The current decline mainly results from ripple effects as Bitcoin lost the $94,000 mark and fluctuated around $92,000, rather than intrinsic factors of LTC.

Source: SosoValue Interestingly, despite the weakening price, institutional interest in Litecoin remains high. Continuous ETF inflows reflect a solid “support base” from organizations, indicating that short-term selling pressure is not enough to undermine LTC’s long-term outlook.

In this context, many institutions seem to be taking advantage of the market correction phase to restructure and accumulate positions, preparing for a new growth cycle as market sentiment and overall trend gradually stabilize.

Increasing volume and OI: Is there a change in momentum?

At the time of recording, Litecoin’s open interest reached $635 million, the highest since July 2025 – when LTC broke out strongly and surpassed $100. Trading volume also rose to $1.1 billion, comparable to the most active sessions in mid-November.

Source: CoinGlass The simultaneous increase in open interest and volume indicates the market is “heating up” again, implying that large capital flows are quietly positioning for a volatile scenario, including the possibility of an upward move.

However, this enthusiasm is not enough to confirm a trend. Open interest and volume only carry positive significance when accompanied by clear re-pricing processes. Conversely, if prices continue to weaken, it signals that the bears still hold control, and new positions may turn into traps for buyers.

Decisive moves in the downtrend

Currently, Litecoin whale activity has increased significantly, showing that large investors are actively betting on a potential rebound.

This behavior is common before trend reversals. Data from CryptoQuant, through average order size in the spot market, also reflects growing whale interest, while retail investors are almost on the sidelines.

In the past, aggressive whale positioning has triggered short-term recoveries, though sustaining long-term momentum has not always been guaranteed. Upcoming news factors will play a key role in confirming this scenario.

Source: CryptoQuant The question is: are whales skillfully front-running the bottom, or are they just “catching falling knives”? As whale activity continues to rise, the market will closely monitor whether this pattern leads to a sustainable recovery or if the bears still maintain control.

LTC at a key support zone

At the time of recording, Litecoin is trading around $70.21. On the weekly timeframe, the price is gradually approaching the critical support zone at $52 – the bottom of the broad accumulation range of $52–$143 that has persisted since 2021.

Notably, momentum indicators like RSI and MACD are both in oversold territory, reflecting selling pressure has been pushed to high levels, raising expectations for a potential technical reversal.

Source: TradingView In this context, investors are closely watching the price reaction in this sensitive area, as the big question is whether Litecoin can establish a stable base for recovery or if it will continue to face deeper weakening risks.