Sourec: Wit Olszweski | Shutterstock
- The anticipation surrounding the upcoming events led to the native coin of the network reaching a local price bottom of $85.
- Litecoin is currently maintaining a position above the $100 mark, transitioning from being a resistance level to acting as a support level.
The recent significant price surge of Litecoin (LTC) in the past week has resulted in its Market Value to Realized Value (MVRV) ratio, calculated on a 30-day moving average, surpassing the 30% threshold. Historically, LTC’s price has often experienced a decline when in such a position.
In a recent Twitter post on July 4th, crypto analyst Sumit Kapoor highlighted an intriguing observation. According to Kapoor, historical data shows that whenever Litecoin’s Market Value to Realized Value (MVRV) ratio (30-day) surpassed the 30% threshold since 2018, the price of LTC experienced an average decline of 41%.
🚨🚨 𝐀𝐓𝐓𝐄𝐍𝐓𝐈𝐎𝐍 𝐋𝐈𝐓𝐄𝐂𝐎𝐈𝐍 𝐇𝐎𝐋𝐃𝐄𝐑𝐒
#Litecoin MVRV 30D has hit the 35% level, which has historically been very bearish for the $LTC price.
Whenever this level has exceeded the 30% mark since 2018, the price of #LTC has crashed an average of 41% 😨… pic.twitter.com/qUxDEunJC3— Wise Advice By Sumit Kapoor (@sumitkapoor16) July 4, 2023
According to Santiment, a leading market intelligence platform, this metric reached its highest point at 36.25% on July 2nd and subsequently started declining. With its operations conducted on a proof-of-work (PoW) network, Litecoin has been steadily gaining traction recently, creating a sense of anticipation among investors and enthusiasts. The upcoming third halving event on the chain has garnered significant attention and has further fueled the growing momentum surrounding Litecoin.
LTC’s ‘Smart Money’ Activity
The anticipation surrounding the upcoming events led to the native coin of the network reaching a local price bottom of $85, marking the departure of “weak hands” and the entrance of “smart money” investors as the new quarter began. This significant development subsequently triggered a 20% increase in the value of LTC.
Additionally, the confirmation of this observation came from an on-chain analysis of the altcoin’s Network Profit/Loss (NPL) metric. This metric effectively tracks the average profit or loss of coins as they change addresses daily, offering valuable insights into periods of profit-taking or holder capitulation within the network.
Data sourced from Santiment reveals that LTC’s NPL experienced a decline to -44.04 million on June 30th, coinciding with the subsequent climb in the altcoin’s price. Although the upward momentum appears relatively modest, the influence of LTC’s ‘smart money’ activity continues to be observable.
Source: Santiment
An additional noteworthy metric is the Age Consumed, which exhibited a notable surge for LTC. On June 30th, the Age Consumed metric unexpectedly rose to 438.91 million, suggesting a substantial transfer of dormant LTC coins to new addresses. This behavior shift among long-term holders indicates a noteworthy change in their activity.
It is well-known that long-term holders do not typically engage in random transfers of their assets to new addresses. As a result, a renewed activity involving dormant coins often signifies a significant shift in market conditions and can indicate a local price bottom.
After the notable spike in LTC’s Age Consumed metric, its price experienced a surge, suggesting the emergence of a new bull cycle in anticipation of the upcoming halving event.
Litecoin Price Prediction
Litecoin is currently maintaining a position above the $100 mark, transitioning from being a resistance level to acting as a support level. This is shown in the weekly chart below, illustrating that this level also serves as the upper trendline of LTC’s ongoing ascending triangle pattern.
LTC/USD weekly price chart. Source: TradingView
As a result of surpassing the upper trendline of the descending triangle pattern, LTC has initiated a breakout phase from a technical standpoint. Typically, a breakout from a descending triangle pattern reversal has the potential to drive the price up to the maximum height of the pattern. Consequently, Litecoin’s breakout from the descending triangle suggests a target price of approximately $240 by 2023, indicating a significant increase of 140% from the current price levels.
However, it is essential to consider the possibility of a bearish scenario where Litecoin’s price follows the ascending channel pattern instead. In this case, the price of LTC may test the lower trendline around $85 during the third quarter, representing a decrease of approximately 15% from the current price levels.
Crypto News Flash does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. Readers should do their own research before taking any actions related to cryptocurrencies. Crypto News Flash is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned.
Credit: Source link
