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On-chain data shows Litecoin is healthy, potential for LTC/BTC rebound

On-chain data shows Litecoin is healthy, potential for LTC/BTC rebound

On-chain data around Litecoin is showing several healthy indicators, including an increase in the number of large transactions on the network. Apart from that, Litecoin’s volatility and price correlation to Bitcoin have dropped, indicating that there’s potential for a major LTC/BTC rebound.

Deep dive into Litecoin network data

The world’s fifth-largest cryptocurrency by market cap, Litecoin, has spent the better part of the year struggling against Bitcoin. After dropping to a yearly low of $65 at the beginning of September from a peak of $98 at the beginning of August, the coin has only now started showing signs of recovery.

Nonetheless, reports of mining unprofitability and a decreasing hashrate, stemming from the halving, seem to have raised doubts about the network, even though fundamentally Litecoin remains secure, according to answers in an interview with founder Charlie Lee.

However, a deep dive into Litecoin showed that the lack of confidence was largely unfounded. Instead, network data shows Litecoin is both healthy and growing. Data service Into The Block showed that the concentration of large holders on the network was going up, as was the number of large transactions.

Moreover, the coin’s price hasn’t dropped significantly after the Aug. 5 halving, but its correlation to Bitcoin, one of its main bullish indicators, did.

More large transactions and more whales

In the past 24-hours, the Litecoin network has seen the number of large transactions on its network go up. Into The Block defines a large transaction as greater than $100,000, and the data revealed that there is an increasing number of people moving large amounts of money on the Litecoin network.

Large transactions chart
Source: Into The Block

Another major bullish sign is the number of people who have made money on Litecoin. For any balance of tokens, Into The Block finds the average price at which the tokens were purchased and compares it to its current price. If average costs were less than the token’s current price, the address would be “in the money,” up by a meaningful margin.

In the money chart
Source: Into The Block

The graph shows that 1.09 million, or a third of all Litecoin addresses, were in the money.

Litecoin’s correlation to Bitcoin, which is seen as one of the network’s main bullish indicators, has also been steadily declining. The coin reached its 30-day high Bitcoin correlation on Sep. 4, just before the halving, at 0.93. However, the correlation factor has been dropping ever since and has gotten as low as 0.42 at press time.

Correlation to BTC chart
Source: Into The Block

In the past month, there has also been an increase in the number of large Litecoin holders. Into the Block found a 1.68 percent increase in the number of addresses that have been holding LTC for at least a year.

This, followed by a 0.72 percent increase in the volume of assets held in addresses holding Litecoin for a year or more (HODLRs), demonstrates that most whales have retained their LTC  holding even after a tough year.

Long term hodlers
Source: Into The Block

Overall, it seems the skepticism from the cryptocurrency’s decreasing hash rate and lackluster price performance is unwarranted. Fundamentally, Litecoin continues to show strong growth.

Litecoin | LTC

Updated: Nov 7 at 2:32 am PDT
$68.95
-0.4%

Litecoin, currently ranked #5 by market cap, is down 0.4% over the past 24 hours. LTC has a market cap of $4.36B with a 24 hour volume of $2.37B.

Chart by CryptoCompare

Litecoin is down 0.4% over the past 24 hours.

Posted In: , Analysis, Price Watch

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Priyeshu Garg
Author

Priyeshu Garg

Crypto Analyst @ CryptoSlate

Priyeshu is a software engineer who is passionate about machine learning and blockchain technology. He holds an engineering degree in computer science engineering and is a passionate economist. He built his first digital marketing startup when he was a teenager, and worked with multiple Fortune 500 companies along with smaller firms. When he is not solving transportation problems at his company (Ola), he can be found writing about the blockchain or roller skating with his friends.

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