Litecoin Experiences 6.5% Retracement – Will Whales and ETF Inflows Drive a Reversal?

Litecoin faced a 6.54% drop on January 19, 2026, following a hack earlier this month, raising concerns among investors about the recovery process.

Key Takeaways

Litecoin's price dropped by 6.54% on January 19, 2026, following cybersecurity concerns.
Despite the price decline, there was a notable $2 million inflow into Litecoin ETFs, reflecting strong institutional interest.
Litecoin's Open Interest reached $635 million, indicating potential market momentum.
Whale activity increased during the price drop, signaling large investors preparing for a possible reversal.
Litecoin is nearing key support levels, with technical indicators suggesting it might be oversold.

Litecoin Experiences 6.5% Retracement – Will Whales and ETF Inflows Drive a Reversal?

Litecoin Chart Source: CoinMarketCap

However, institutional interest and activity among large investors, known as whales, remained strong. Still, this significant decline raises the question: What caused this dip even as institutional confidence seemingly grew?

Understanding Litecoin’s Price Decline and ETF Inflows

While Litecoin's price retraced, the asset also witnessed $2 million in ETF inflows last week. This price decline was primarily influenced by Bitcoin's drop of $94,000, which settled around $92,000.

Despite this downturn in price, institutional interest in Litecoin has persisted.

Litecoin ETF Activity Source: SosoValue

The recent influx of ETF investments indicates that even with bearish price action, institutional backing for Litecoin remains strong. This persistent support could suggest a potential market reversal in the long run, as institutions are setting themselves up for future growth during this phase of market stabilization.

Increased Volume and Open Interest: Is Momentum Shifting?

As of our latest update, Litecoin's Open Interest reached $635 million, marking its highest point since July 2025, when LTC surged above $100. The trading volume also peaked at $1.1 billion, a level not observed since mid-November.

Litecoin Trading Activity Source: CoinGlass

The rising volume and Open Interest suggest heightened market activity, with significant players positioning themselves for potential gains. However, it is crucial for investors to stay vigilant, as rising Open Interest and volume need to be accompanied by positive price adjustments. Continuous price falls could indicate that bearish pressures are still dominating the market.

Whale Activity Intensifies Despite Market Decline

During this downturn, activity from Litecoin whales has surged, hinting that large traders are gearing up for a rebound. Such behavior typically precedes price reversals, and metrics on CryptoQuant demonstrated that average order sizes from whales have been increasing. Conversely, retail investors have been notably absent from this activity.

Litecoin Whale Activity Source: CryptoQuant

The pressing question now is whether these whales are attempting to catch the falling knife. With the heightened whale activity, investors are keenly observing whether this trend will contribute to a sustained price rebound, or if bearish forces will continue to prevail.

Litecoin Approaches a Critical Support Zone

At the time of this report, Litecoin is trading at $70.21. On a weekly chart, it is approaching a key support level around $52, which falls within the broader trading range of $52 to $143 established since 2021.

Analysis from the RSI and MACD indicators indicates that Litecoin may be oversold, suggesting a potential turning point could be near.

Litecoin Indicator Source: TradingView

Market observers are now focusing on whether Litecoin's price can maintain its position at this critical support level or if it will continue to decline further.

Conclusion

As Litecoin navigates this challenging phase with rising whale activity and institutional interest, the market eagerly anticipates whether it will rebound or continue to face downward pressure. The interplay between institutional investments and retail market sentiment will be key in determining Litecoin's short-term trajectory.