Do on-chain indicators paint an optimistic picture for Litecoin?
Litecoin price movement more or less mirrored the price movement of the broader crypto market in July, but it is worth noting that the altcoin loss margin is much lower than that of some of the other major altcoins in the world market.
Litecoin exploded in trading volume on July 20 after testing long-term support at $ 109, making a monthly high. However, the trading volume is still well below May-July levels, and the uptrend has occurred as altcoins move deeper into the oversold territory – a sign that more people are buying the dip. In fact, the altcoin rose on the 4-hour chart.
Interesting on-chain metrics
One report Santiment’s recent highlights show that although the price has fallen 13.8% recently, the number of active addresses has increased 47.5% in the last 10 days. In addition, a recent analysis showed that Litecoin ranks 3rd on last week’s sentiment chart with a score of 33 of the top 5 coins.
With the LTC / BTC pair falling back to support after being denied at 4200 sats, further declines are not impossible. Although it has posted some small gains, if the pair continues to decline, the pair could be range peg for a few days. Its 365-day MVRV rate is -39%, which is roughly the 2019/2020 low.
“Historically, the downward trend is likely to continue, but it will be interesting to see if the -40% MVRV is the place for LTC to recover.”
In addition, addresses with 1k – 100k LTC increased their inventory to 270,000 LTC.
However, due to the low trading volume and low sentiment, it is still too early to conclude that Litecoin will fully recover.
Litecoin getting stronger?
While most of the above indicators paint a pretty healthy picture for Litecoin, it cannot be overlooked that, for altcoins, growth activity and social dominance also play a big role in the protests.
LTC’s developer activity declined on July 16. Although it is higher than at the end of June, it is still well below April’s ATH level. The social dominance of the altcoin is also well below its ATH level from April a few days.
At this point in time, Litecoin is offering a neutral outlook rather than an uptrend. However, if the daily active addresses continue to increase, it could turn out that more and more traders are interested in Litcoin and that this will be the main catalyst for the LTC boom in the future.
According to Ambcrypto