- About $70 million worth of LTC are in line to be sold, possibly plunging the price below $70.
Network activity also dropped, while Litecoin could also be overvalued.
As a researcher with experience in cryptocurrency market analysis, I’ve been closely monitoring the recent developments in the Litecoin market. The latest data suggests that there is a significant sell order backlog on exchanges, worth approximately $70 million, which could potentially push the price below the current level of $74.64.
Over the past week, Litecoin’s [LTC] price has climbed by 4.18%, reaching a current value of $74.64. Nevertheless, any progress made could potentially be undone if Litecoin owners choose to execute their sell orders on cryptocurrency platforms.
As a researcher studying market trends using IntoTheBlock’s data, I’ve observed an interesting finding regarding the Exchange On-Chain Market Depth. More coins are waiting to be sold on the ask side compared to those wanting to buy on the bid side. In simpler terms, there are more sellers than buyers in this market scenario.
Litecoin holders are ready to liquidate
Below is depicted a noticeable discrepancy in the quantity of LTC bids. To be more precise, approximately 928,200 Litecoin coins, equivalent to around $70 million, are slated for sale once the Litecoin price ascends to $74.65.
As an analyst, I’d interpret the situation by saying: Should this occur, the cryptocurrency’s value might dip, potentially reaching levels between $72 and slightly under $70. AMBCrypto discovered a metric that adds credence to a potential price decline for the digital asset.
As a crypto investor, I’ve been closely monitoring the Network Value to Transaction (NVT) ratio lately. This metric provides valuable insights by examining the correlation between a cryptocurrency’s market capitalization and the number of transactions occurring on its network. By doing so, it helps me assess whether the current price level is justified based on the network’s usage activity.
If the market capitalization increases more rapidly than the trading volume, the Network Value to Transactions Ratio (NVT) will escalate. When this occurs, it implies that the network is currently overvalued.
If the network’s volume exceeds its market capitalization, the NVT ratio decreases, suggesting that the network may be underpriced.
Based on Glassnode’s data at the current moment, Litecoin’s NVT ratio has significantly increased. This implies that, considering the present market situation, Litecoin can be considered overvalued.
Based on the analysis conducted by AMBCrypto, other than the mentioned indicators, they additionally looked into Litecoin’s MVRV ratio to assess its potential price movement in the near future.
More profits, more issues
The abbreviation MVRV represents Market Value to Realized Value. This metric assesses profitability for holders based on current market value versus the value realized from previous transactions. If the MVRV ratio reaches unusually high levels, the coin may be considered overvalued.
If the reading is negative, or the value is undervalued based on the 30-day MVRM ratio of 14.10% for Litecoin, it could present a good buying opportunity at current prices. This indicates that the average return for LTC holders would be approximately 14%, should they choose to sell their holdings.
From a market perspective, where most cryptocurrencies have been trading flat, Litecoin’s value might appear inflated. Moreover, we took a closer look at the number of active addresses associated with Litecoin.
Based on Santiment’s data, the number of active Litecoin addresses within the last 24 hours dropped to approximately 401,000. An increase in this figure implies that a larger number of distinct addresses have been engaged in transactions.
Realistic or not, here’s LTC’s market cap in BTC terms
Yet, a noteworthy reduction occurred in contrast to the previous week of June, with the number of active addresses on the network decreasing.
If the network activity of Litecoin (LTC) keeps decreasing, it’s likely that demand for the cryptocurrency will follow suit. Consequently, its price might be forced to go down. However, should buying pressure surge instead, the price of Litecoin could bounce back.
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2024-07-03 21:11