- Litecoin seems to be having a good year as existing network users increase activities, however, new demand for the network declined.
- Analysts have observed that various technical indicators are showing a trend reversal.
Litecoin (LTC) has made a 5.5% surge in the last 24 hours to trade at $75.51. In the last seven days, the asset has made a whopping surge of 15% with a bullish score of 85/100, taking its market cap to $5,585,428,864.
Its incredible run transcends the price action as its network activities seem to be on the rise. Since January 1, Litecoin has recorded a surge in transaction count, indicating that there is a renewed interest and activity on the network.
According to on-chain data provider IntoTheBlock, Litecoin has processed more than 6.3 million transactions in the past 10 days. Analysts observed that the growth is linked to the increase in active address count since the beginning of the year.
Glassnode data also shows that the daily count of unique addresses on Litecoin has surged by 17 percent since January 5. The network’s hashrate increased to 885.09 TH/s on January 10. This is the second highest level recorded. The increase in user activity has also caused the transaction fees on Litecoin to rise.
It is reported that the total amount of fees paid to process transactions daily has surged by 38 percent since January 4 according to reports. One interesting observation is that new demand for the chain has declined since the beginning of the year despite the activeness of the existing users.
More on the Litecoin Price and Network Activities
Glassnode data has also disclosed that the daily number of unique addresses that appear for the first time in Litecoin-related transactions on the network has fallen by almost 45 percent in the last 10 days. This is evident in the data displayed by Glassnode showing that 1.20 million new addresses were created on the network as of January 1. By January 10, the figure had fallen to 688,000.
The recent surge of the LTC price has been associated with the spot Bitcoin Exchange-Traded Fund (ETF) approval. Several experts have predicted that the products could attract billions of dollars into the market. According to CF Benchmarks CEO Sui Chung, the first 30 minutes of trading after approval attracted $400m inflows. He also mentioned the impact on the broader market including Litecoin.
The ETF will most likely create more demand which will therefore lead market makers to assign more capital to support that liquidity. Crypto market liquidity still hasn’t fully recovered from the FTX crash in November 2022. This could therefore benefit the entire crypto ecosystem, particularly as it starts to attract the attention of this new group of investors.
Analysts have stated that Litecoin might be poised to shed its gains since the Awesome Oscillator indicator is returning green down-facing histogram bars. This generally indicates a weakening bullish trend. One of the typical signs is that the price may be rising at a decreasing speed. It is a sign of a potential trend reversal.
On top of that, daily accumulation by traders has declined steeply with the Money Flow Index (MFI) falling below the center-line. This means that selling pressure is currently overpowering buying pressure.
