Litecoin mining difficulty rises as demand for LTC wanes
- Litecoin’s mining difficulty reached a seven-day high, but network transactions decreased.
- Litecoin experienced a high capital inflow amid increased open positions.
The mining landscape for Litecoin [LTC] has witnessed a notable shift as mining difficulty continues to rise. According to CoinWarz, Litecoin’s mining difficulty increased from 24.76M to 26.38M in the last seven days.
Read Litecoin’s [LTC] Price Prediction 2023-2024
Rising difficulty, falling transactions
This increase implied that Litecoin miners were finding it more challenging to find the right hash for each block at press time. But on the positive side, the increase also ensured that more miners could enter the network.
However, Litecoin is not new to spikes in difficulty, especially during periods when the halving is close. Before the last halving in 2019, the mining difficulty also increased. But it fell moments after miners got their rewards.
On the market side, demand and interest were not what it was prior to the 2019 halving. At press time, Litecoin’s 30-day active addresses had fallen to 8.75 million.
A hike in the metric would have suggested an increase in sending and receiving on the network. However, the decrease means that successful transactions on the network have not been as impressive as some corners would have expected.
Similarly, LTC circulation also fell to 6.85 million. This drop indicated that the number of LTC utilized in transactions decreased.
Flow is still evident
Another look at the mining data showed that Litecoin’s thermocap was increasing at the time of writing. Also known as the “aggregate security spend,” the Thermocap is the aggregated number of coins paid to miners and serves as a proxy for mining resources spent.
It serves as a measure of the true capital flow into the network. Notably, it is computed as the aggregate coin transactions multiplied by the asset price at the time when they were mined.
The increase in Thermocap means that a significant amount of liquidity flowed into the Litecoin network despite a fall in active addresses.
How much are 1,10,100 LTCs worth today?
However, traders still seemed to be bullish on LTC, based on indications from the funding rate. For context, the funding rate is a system of periodic payments made to short or long traders in the derivatives market.
Also, LTC’s Open Interest (OI) increased to 305 million at press time. The OI is a measure of the money flow into the derivatives market. Since the indicator increased, it means that significant money was flowing into open positions.