- Litecoin saw a spectacular increase in the number of daily active addresses.
- The massive market-wide carnage has wiped out LTC’s gains in the second half of December.
Litecoin [LTC] has witnessed a new increase in the number of daily active addresses. a Santiment post on X (formerly Twitter) highlighted this development.
The post noted that such a rise could lead to a larger market cap, which is another way of saying that prices would rise.
📊 #Litecoin, #MakerAnd #LidoDao are all seeing rapidly increasing address activity. Normally, this gradually increasing utility is accompanied by growth in market capitalization. While $MKR And $LDO I’ve seen this happen $LTC has not yet seen a similar increase. https://t.co/hOwwknnP98 pic.twitter.com/rbmswUrx82
— Santiment (@santimentfeed) January 4, 2024
This is due to the increased utility of the token and the rising demand for it. Litecoin has seen a rise in this value twice in December, and each time it has been followed by a sustained rally. Could history repeat itself?
Research into the swell in daily active addresses
In general, a single measure does not provide an accurate picture of the state of the market. A combination of statistics does a better job.
That is why AMBCrypto looked at the social sentiment and the MVRV ratio in addition to the active addresses.
Before any conclusions can be drawn from the statistics, the previous peaks in the number of active users must be examined. The first occurred on November 14, but this was after LTC had reached a local top at $76.8.
The next two increases in the metric occurred on December 6 and December 20. The former saw a 9% price increase within three days, and the latter saw a similar return in a week.
When the metric rose again in January, it was met with a massive drop in Litecoin prices.
Source: Santiment
The MVRV ratio fell below 0 on January 3 after the large price dump. Weighted sentiment has also been largely in negative territory since mid-December.
This suggested a general lack of confidence in the idea of a Litecoin rally. Yet it is also possible that Litecoin prices form a bandwidth and accumulate before moving higher.
Where are LTC prices headed?
AMBCrypto noted this in the table with supply distribution per balance of addresses. The graph showed a strong upward trend in the balances of addresses with less than 10,000 LTC.
Source: Santiment
On the contrary, the number of addresses with an LTC of 10,000 or more decreased. This was an interesting finding. The downward trend has been going on since 2022.
However, the August 2023 halving saw isolated periods of accumulation from January 2023 to March 2023. Another period of whale accumulation occurred in June of that year.
Therefore, this downward whale trend suggested that Litecoin’s price action might not be explosively bullish in the coming months.
Source: LTC/USDT on TradingView
The 12-hour price chart showed a bearish market structure after the decline below $71.41. Moreover, the bullish order block of H4 (cyan box) has been broken below the $68 area. Nevertheless, the bulls still have some hope.
Read Litecoins [LTC] Price forecast 2023-24
The 78.6% Fibonacci retracement level saw a candle wick to $58, but not a 12-hour trading session just below that. Until such a session close happens on the H12 or H4 charts, the bulls could have a say in the battle.