On-chain data suggests that the evolution of these two Litecoin indicators could explain why the cryptocurrency has seen its latest price surge.
Litecoin volume and social dominance have increased recently
in a new mail On X, on-chain analytics firm Santiment has discussed what Litecoin’s underlying metrics have looked like during the latest surge in its price.
There are two indicators of relevance here: Transaction Volume and Social Domain. The first of them, the Transaction volumetracks the total amount of tokens (in USD) participating in transfers on the LTC network.
When the value of this metric is high, it means that investors are engaging in a lot of trading activity related to the asset. This trend may be a sign that interest in LTC is high right now. On the other hand, a low indicator may suggest that investors may not be paying much attention to the cryptocurrency since they are not moving a significant amount.
Now, 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 graph above, Litecoin transaction volume has seen an increase recently, implying that activity on the network has increased. So far, the indicator has reached a high of $3.97 billion, the highest level since June 2023.
Generally, a large amount of activity on the network generates volatility in the price of the cryptocurrency. However, this emerging price action can take the asset in either direction, as trading volume only measures the pure number of transfers taking place on-chain and contains no information on the split between purchases and sales.
In the current case, however, the increase in activity was followed by an increase in the price of the asset, suggesting that investors have been engaging in accumulation.
The second indicator on the chart, the Social domaintells us about the percentage of the total social media discussions related to the top 100 coins by market capitalization that Litecoin alone is contributing.
It is clear from the chart that the social dominance of LTC has also seen an increase recently, with discussions related to the coin contributing around 1.1% of the sector’s total.
This suggests that the average trader is starting to pay attention to cryptocurrency. Retail interest can help fuel rallies, but too much may be something to watch out for, as Fear of missing out (FOMO) historically has led to price highs.
LTC Price
Litecoin had approached the $75 level at the beginning of the rally, but the coin appears to have seen a pullback since then as it is now back to $72.5.
Looks like the price of the coin has been riding an uptrend in recent days | Source: LTCUSDT on TradingView
Dall-E Featured Image, Santiment.net, TradingView.com Chart
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