Key Takeaways
- The price of Litecoin increased 43.8% over seven days, making it one of the best performing cryptocurrencies this week.
- The number of LTC addresses in use has crossed 60 million, following steady growth over the past two years.
- While metrics on the chain are indicative of over-thinking conditions, the trading volume and technical outlook are bullish.
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Litecoin prices increased 43.8% over the past seven days, putting the price of the coin above $ 100 for the first time since July 2019 and making it one of the best performing cryptocurrencies of the week.
Broad Market euphoria
The rise of 43.8% in Litecoin’s price over the past week seems to be a result of the ever-high Bitcoin-generated liquidity flows and the widespread market euphoria that resulted.
Litecoin, however, performed even better than Bitcoin itself. In fact, it outperformed all other top 50 cryptocurrency in terms of seven-day earnings. Only three minor altcoins (Chimpion, Elrond, and SwissBorg) outperformed Litecoin.
Long-term trading volume growth may also be behind the coin’s earnings. In November 2020, Litecoin’s trading volume was almost double what it was in August 2019. The growth in Litecoin’s trading volume is a solid indicator of huge liquidity in the market.
In addition, Litecoin’s current weekly price chart is very bullish. The cryptocurrency has broken above the symmetrical triangle pattern and 23.6% Fibonacci retracement level, now targeting 2019 highs of $ 146. The support levels, in case of a downturn, are $ 90 and $ 83.
On top of that, investors are looking for the next two-digit earnings, as Bitcoin breaks the psychological sluices at $ 20,000. While this may come from any of the thousands of currencies in the market, organizations are more likely to favor liquid and established cryptocurrency such as Litecoin.
Speed sees Small Change
Litecoin’s pace – a measure of how fast the coin is circulating – has not changed much since Q3 2019. This measure is calculated by dividing the volume of transactions on the chain by the market cap.
There is one important factor to play here. In 2019, Litecoin was halved a block reward, intended to increase demand and reduce inflation. But judging by low speed, that strategy failed to generate demand, suggesting that there is little improvement in Litecoin’s use in transactions.
On the other hand, Litecoin now has more than 60 million addresses, following a linear growth since 2018. That suggests that consumers may be holding LTC in the long run unspent.
Mining and Hashrate Trends
Crucially linked to Litecoin’s increasing market value is its mining activity. The coin mining hashrate continues to trend around the lower limits (150 TH / s), seen for the past three years.
Halving Litecoin in 2019 reduced miner’s block awards to discourage the creation of new Litecoin and reduce inflation. Now that the price of LTC is higher, more mining revenue could encourage miners to join the network once again.
This, in turn, could slightly affect prices due to supply and demand.
Litecoin is Generally Healthy
Litecoin is enjoying the reputation of being the silver to Bitcoin gold, and there are definite signs that fans are holding it. It also has a healthy core development team led by Charlie Lee and is currently due for a privacy update, expected to roll out in the first half of next year.
At the time of writing, this author was holding Bitcoin and less than $ 15 altcoins.
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