Assessing the LTC20 influence on Litecoin’s stretching wallets
- Retail Litecoin users found the LTC20 test worthy of admiration.
- The project’s creator opined that an LTC rally could be next after the halving.
Litecoin [LTC], which recently introduced the LTC20 token standard, was caught in a wave of surging active addresses. According to Santiment, the 24-hour active addresses grew from an eye-sore state on 2 May and reached 900,000 eight days later.
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Active addresses indicate the level of user interaction around a coin. This is measured by the number of unique sending and receiving wallets.
Although the metric decreased slightly at press time, it remained far above all the points it had reached before the start of May.
LTC20: Riding on the BRC-20 hype, and thriving
Surely, one would have wondered what was responsible for the change in trend.
Santiment, in its 12 May analysis, opined that the introduction of LTC20 played a vital role in the stretching effect since the surge began on the day the standard was introduced.
With the Litecoin halving fast approaching, the Charlie Lee-founded project developed the token standard as an experiment on the Litecoin Ordinals protocol.
Similar to Bitcoin’s [BTC] BRC-20, the test allows for the creation and management of fungible tokens on the Litecoin blockchain, while opening up a range of possibilities for decentralized Applications (dApps) and smart contracts on the network.
Though LTC20 is still in its early stages, it seems to represent a significant step forward in the project’s evolution. This was because Litecoin had already begun utilizing the LTC20 application through the development of NFTs.
But unlike Bitcoin Ordinals, whose top asset is the text segment, Litecoin’s first significant collection was the Litecoin Punks. And at press time, this 84 million in supply collection was already public on the Ordinals Market.
Traction and the possibility of a rally
Consequently, the innovation has also led to a tremendous hike in discussion around the Litecoin Twitter community. In fact, this has affected the participation of the small wallet groups holding the coin.
Based on information from the on-chain analytic platform, the number of addresses holding 0 to 10 LTCs had swollen substantially. And there is no doubt that the LTC20 impacted the rise, due to the date the increase began.
Meanwhile, it remained uncertain if Litecoin puffery would continue despite recording a spike in transactions, and an August date for the halving. According to Glassnode, the Litecoin thermocap continually increased.
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The thermocap serves as a measure of the true liquidity flow into the network by measuring the aggregate number of coins paid to miners and the resources used.
Historically, a hike in this metric means that circulating supply was high, and could affect the LTC price positively. Meanwhile, the project’s creator Lee, tweeted that LTC has a superb upside potential after its halving.
I can see an upside target of 10% (0.025 LTC/BTC). In the next bull market, 5% (0.0125) shouldn't be too hard to achieve. I honestly don't see it going much below 1% (0.0025) on the downside. The next halving will be in ~92 days. This is going to be fun.https://t.co/erotIo38Oc
— Charlie Lee Ⓜ️🕸️ (@SatoshiLite) May 2, 2023