84 Interactions, 2 today
In July, the price of Litecoin closely matched that of the broader cryptocurrency market. However, the alt’s margin of loss was far lower than some of the market’s other large alts.
On July 20, after testing its lower long-term support at $109, Litecoin saw a substantial jump in trade volumes (the largest in July). However, trade volumes were still significantly lower than in May and July. Furthermore, the altcoin showed an increase after bouncing in the oversold zone.
This emergence from extreme oversold conditions and the appearance of dip buyers encouraged a better outlook for LTC over the past few trading sessions. In fact, on the four-hour chart, not only did the altcoin register a price uptick, but it also recovered from the oversold zone.
Are metrics painting a bullish narrative?
A recent Santiment report highlighted that despite a 13.8% drop in price recently, the amount of unique addresses interacting with LTC has grown by 47.5% over the last 10 days. What’s more, a recent article also pointed out that Litecoin stood third on last week’s sentiment charts with a score of 33 among the top five.
With LTC back at support after rejecting the 4200 sats level on an LTC/BTC chart, the probability of more decline is not ruled out. LTC, on the other hand, has made some tiny gains, and if this trend continues, the altcoin may be on the mend. In the midst of this, its 365-day MVRV ratio was -39 percent, much the same as the 2019/2020 bottom. According to the report,
“Historically speaking, there’s still more room to the downside, but it’ll be interesting to see if -40% gets confirmed as a de-facto ‘bounceback’ zone in days to come.”
Furthermore, addresses with 1k – 100k LTC have added 270,000 LTC to their holdings.
However, given low trade volumes, low social sentiment, and the alt’s unimpressive domination, it’s still too early to declare that Litecoin is on its way to a full rebound.
So, does this mean Litecoin is looking healthy?
While the majority of the indicators cited above portrayed a positive image for Litecoin, it can’t be overlooked that alts’ development activity and social dominance play a significant influence in their rallies.
On the 16th of July, LTC’s development activity slowed. And, despite being substantially above its end-of-April – mid-July levels, it was still well below its April ATH. The coin’s social dominance didn’t appear to be doing so well, and it had dropped at the time of writing.
At this time, Litecoin has a more neutral rather than a bullish view. However, if the network’s healthy increase in daily addresses continues, it could be beneficial. A unique sign of network strength among crypto’s top capitalisation would be sustained increase in the same.