On-chain data indicates that changes in these two Litecoin metrics may help explain the recent surge in the cryptocurrency’s price.
Recent Increases in Litecoin Volume & Social Dominance
In a recent post on X, the on-chain analytics company Santiment examined how Litecoin’s fundamental metrics have performed during its latest price increase.
Two key indicators are significant here: Transaction Volume and Social Dominance. The Transaction Volume monitors the total dollar value of tokens being transferred on the LTC network.
A high reading of this metric indicates that investors are actively trading the asset. This trend may suggest that interest in LTC is currently strong. Conversely, a low indicator might imply that investors are not focused on the cryptocurrency, as they are not executing significant transactions.
Now, here is a chart illustrating the Litecoin Trading Volume trends from the past few months:
The metric has shown a recent spike | Source: Santiment on X
As shown in the graph above, Litecoin’s transaction volume has jumped recently, indicating increased network activity. The metric has peaked at $3.97 billion, the highest since June 2023.
In general, increased network activity can lead to volatility in cryptocurrency pricing. This new price movement could swing the asset in either direction, as Transaction Volume does not provide information about the balance between buys and sells.
However, in this instance, the rise in activity has coincided with an increase in the asset’s price, suggesting that investors have been accumulating.
The second indicator on the chart, Social Dominance, measures the percentage of discussions about the top 100 coins by market cap that are specifically focused on Litecoin.
From the graph, it is clear that LTC Social Dominance has also increased recently, accounting for approximately 1.1% of total discussions in the sector.
This indicates that average traders are beginning to take notice of the cryptocurrency. Increased retail interest can drive rallies, but excessive attention could signal caution, as Fear Of Missing Out (FOMO) has historically coincided with price peaks.
LTC Price Update
Litecoin approached the $75 mark earlier in the rally, but it appears to have experienced a pullback, currently sitting at $72.5.
The coin's price has been on an upward trend recently | Source: LTCUSDT on TradingView
Image from Dall-E, data from Santiment.net, chart from TradingView.com
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