On-chain data suggests that developments in these two Litecoin indicators could explain why the cryptocurrency has seen its latest price surge.
Litecoin volume and social dominance have surged recently
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There are two relevant indicators here: transaction volume and social dominance. The first of these, the Transaction volumetracks the total number of tokens (in USD) involved in transfers on the LTC network.
When the value of this measure is high, it means that the investors are participating in a large amount of trading activity related to the asset. Such a trend could be a sign that interest in LTC is currently high. On the other hand, a low indicator could indicate that investors may not be paying much attention to the cryptocurrency as they are not moving a significant amount.
Here is a chart showing the trend in Litecoin trading volume over the past few months:
The value of the metric appears to have spiked in recent days | Source: Santiment on X
As shown in the chart above, Litecoin transaction volume has seen a sharp increase recently, implying that activity on the network has increased. So far, the indicator has reached a peak of $3.97 billion, the highest level since June 2023.
Generally, a large amount of network activity leads to volatility in the price of the cryptocurrency. However, this emerging price action can move the asset in either direction, because transaction volume only measures the pure number of transfers taking place on the chain and does not include information about the division between buying and selling.
However, in the current case, the peak in activity has been followed by a rise in the price of the asset, indicating that investors have participated in the accumulation.
The second indicator in the chart, the Social dominancetells us about the percentage of total social media discussions regarding the top 100 coins by market cap to which only Litecoin contributes.
The chart shows that LTC Social Dominance has also seen an increase recently, with discussions about the coin contributing around 1.1% of the sector’s total.
This suggests that the average trader is starting to pay attention to the cryptocurrency. Retail interest can fuel the rallies, but an excess of it could be something to watch out for Fear of missing out (FOMO) has historically led to top prices.
LTC price
Litecoin had approached the $75 level earlier in the rally, but it appears the coin has seen a pullback since then as it is now back at $72.5.
Looks like the price 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