On-chain data suggests developments in these two Litecoin indicators could explain why the cryptocurrency has seen its latest price surge.
Litecoin Volume & Social Dominance Have Surged Recently
In a recent post on X, the on-chain analytics firm Santiment has discussed about how the underlying metrics of Litecoin have looked through the latest surge in its price.
There are two indicators of relevance here: the Transaction Volume and the Social Dominance. The primary of those, the Transaction Volume, keeps track of the entire amount of tokens (in USD) which are becoming involved in transfers on the LTC network.
When the worth of this metric is high, it means the investors are participating in a high amount of trading activity related to the asset. Such a trend could be a sign that the interest in LTC is high straight away. Alternatively, the indicator being low can suggest the investors is probably not paying much attention to the cryptocurrency as they aren’t moving around any significant amount.
Now, here’s a chart that shows the trend within the Litecoin Trading Volume over the previous few months:
The worth of the metric appears to have spiked in recent days | Source: Santiment on X
As displayed within the above graph, the Litecoin transaction volume has seen a surge recently, which suggests activity on the network has gone up. To this point, the indicator has set a peak of $3.97 billion, which is the very best level since June 2023.
Generally, a high amount of network activity results in volatility within the cryptocurrency’s price. This emerging price motion can take the asset in either direction, nonetheless, because the Transaction Volume only gauges the pure amount of transfers happening on the chain and incorporates no info concerning the split between buys and sells.
In the present case, though, the spike in activity has been followed by an increase within the asset’s price, which suggests the investors have been participating in accumulation.
The second indicator within the chart, the Social Dominance, tells us concerning the percentage of the entire social media discussions related to the highest 100 coins by market cap that Litecoin alone is contributing.
From the graph, it’s apparent that the LTC Social Dominance has also seen an increase recently, with discussions related to the coin contributing around 1.1% of the sector’s total.
This implies that the common trader is beginning to listen to the cryptocurrency. Retail interest will help fuel rallies, but an excessive amount of it might be something to observe out for, as Fear Of Missing Out (FOMO) has historically led to tops in the worth.
LTC Price
Litecoin had neared the $75 level earlier within the rally, however the coin appears to have seen a pullback since then because it’s now back at $72.5.
Looks like the worth of the coin has been riding an uptrend in recent days | Source: LTCUSDT on TradingView
Featured image from Dall-E, Santiment.net, chart from TradingView.com