Altcoin
Are metrics really painting a bullish picture for Litecoin?
Litecoin’s price action has more or less mirrored that of the broader cryptocurrency market in July. However, it is noteworthy that the alt’s margin of loss was way lower than some of the other major alts in the market.
Litecoin, after testing its lower long-term support at $109, registered a decent spike (highest in July) in trading volumes on 20 July. However, the trade volumes were still much lower than their May-July levels. Further, the altcoin after oscillating in the oversold zone highlighted an uptick.
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 on an LTC/BTC chart being back at support after rejecting the 4200 sats level, the possibility of a further downside is not impossible. However, LTC registered some minor gains, and if that continues, recovery might be in store for the altcoin. Amid this, its 365-day MVRV ratio sat at -39%, almost the same level that marked the 2019/2020 bottom. The report further said,
“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.”
Source: Santiment
What’s more, addresses holding 1k – 100k LTC have increased their holdings by 270,000 LTC.
However, in light of low trading volumes, lower social sentiment, and the lackluster dominance of the alt, it’s still too soon to conclude that an all-over recovery is in place for Litecoin.
Source: Santiment
So, does this mean Litecoin is looking healthy?
While most of the metrics sighted above painted a pretty healthy picture for Litecoin, it can’t be disregarded that in the case of alts, their development activity and social dominance also play a massive role in their rallies.
LTC’s development activity registered a downtick on 16 July. And, even though it was well above its April end – July levels, it still was way below its April ATH. Social dominance for the coin too didn’t look all that well either and registered a downtick at the time of writing.
At this point, Litecoin presents a more neutral outlook, rather than a bullish one. However, if the healthy spike in daily addresses continues to grow, it could prove to be good for the network. Sustainable growth in the same would be a rare example of network strength among crypto’s top caps.
