The on-chain analysis shows that it is possible to explain the recent price increase of the cryptocurrency with the activities in these two Litecoin indicators.
Litecoin Volume & Social Dominance Have Surged Recently
The on-chain analytics company Santiment has come out in a new post on X as well addressing how the underlying metrics of Litecoin have looked during the most recent surge in its price.
It is necessary to analyze two metrics: Transaction Volume and Social Dominance. The first of these, the Transaction Volume, tracks the total dollar value of transfers occurring on the LTC network.
When this parameter is high, it indicates that the investors are engaged in large volumes of trading activity in relation to the asset. This kind of trend could be interpreted as indicative of high levels of interest in LTC at the present time. On the other hand, the indicator security level lets you know that no significant volumes are being moved around and so investors are not likely to actively participate in the cryptocurrency market.
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The spikes were accompanied by the surge in Litecoin transaction volume that was reflected on the above graph, meaning that there is an increase in activity on the network as well. To this point, the indicator has reached $3.97 billion which is the highest seen since June 2023.
In most cases, a lot of activity on the network increases the volatileness of the price of the cryptocurrency. A price movement of this nature that emerges can take the asset either up or down depending on the Transaction Volume, which only provides the weight of transfers on the chain but does not inform about the ratio of buys and sells.
In this case, however, the increased level of activity has been translated into an increase in the price of the asset, which means that the investors have been involved in accumulation.
The same goes for the other two indicators in the navy chart: Social Dominance â the percentage of discussions relating to the 100 largest coins in terms of market capital that are exclusively attributed to Litecoin, alongside other cryptocurrencies.
The graph indicates that the LTC Social Dominance has in the last few weeks, been elevated, with the LTC mentions making up about 1.1% within the sector discussions.
This means that it is the average trader who seems to start focusing on the coin. Most of the time such raises in retail appetite can contribute to price increases. On instances where the appetite becomes too reckless, where FOMO (Fear Of Missing Out) motivates such buying, history has shown it to be around the time of price tops.
LTC Price
Litecoin once before in the rally touched the $75 mark but the coin looks to have retraced back still resting at $72.5.