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Over the last 72 hours, the digital asset market has collectively rebounded. Bitcoin was showing significant indications of revival, and altcoins were also contributing. While Ethereum is often considered as a driving factor behind any alt-rally, the inclusion of Litecoin in the same category may appear odd. However, there are crucial indicators that both ETH and LTC are now laying strong foundations for the price increase to continue.
Ethereum: It’s a whales’ game now?
According to Santiment, the supply owned by Ethereum Whale Addresses is approaching an all-time high. Three weeks before the price reached $4,375, the top ten addresses had 19.25 million ETH. The supply retained at the time of writing was 19.08 million, demonstrating that strong ETH holders did not succumb to selling pressure during the downturn.
Furthermore, active addresses appeared to be seeing increased involvement, with exchange deposits falling off the charts. ETH deposits were much higher between the end of April and the 15th of May, but they are now down to levels last seen at the end of February. It is worth noting that ETH deposits were significantly lower in March and early April.
Finally, Ethereum’s long-term 365-day MVRV (Market Value to Realized Value) has not fallen into the negative zone, indicating that long-term holders still have plenty of opportunities to benefit.
From a derivatives point of view, Deribit’s Institutional Newsletter May 2021 pointed out that Ethereum Options Volume continued to gather more interest from traders. According to data,
“581,578 BTC options contracts were traded in May 2021, down 0.8% versus April 2021.
4,891,831 ETH options contracts were traded in May 2021, up 43% versus April 2021.”
How does Litecoin fit into this bullish narrative?
Now, Litecoin has been more of a follower than a leader in the market space during every bullish cycle. However, a recent market sentiment score begs to differ.
Litecoin has the greatest sentiment score of any crypto-asset during the final week of May 2021, according to sentifi.com. It was closely followed by NEO, with other popular assets such as Binance Coin and Dogecoin also on the list. While these elements allow the market trend to shift slightly, trading activity is still required for the price to move up the charts.
In terms of trading volume, Litecoin is currently ahead of the majority of cryptocurrencies. At press time, Coingecko estimated that LTC had a 24-hour trading volume of $4.46 billion. This figure was only slightly lower than Bitcoin, Ethereum, Binance Coin, and Dogecoin.
While LTC was still ranked outside the top-10, it still saw more activity than Cardano, Polkadot, XRP, Chainlink, etc.
Fundamentally, Litecoin’s bullish advance will be confirmed if the price closes over the $209-resistance. The $206-$225 range is a significant level over which LTC will immediately achieve a rally towards $300-$350.
Is there a partnership between the two?
True. While the markets for Ethereum and Litecoin have been associated in recent months, it may signify a bigger optimistic feeling if both of these assets continue to see increases in value and trading volume. It enables other cryptocurrencies to be traded at a greater level, especially as ETH pairings have seen a substantial volume of traffic during bullish cycles.