On-chain data suggests that trends in these two Litecoin indicators could explain why the cryptocurrency has seen a recent price surge.
Litecoin volume and social dominance have skyrocketed recently
In a new post on X, on-chain analytics firm Santiment discussed how Litecoin’s underlying metrics fared during the recent price spike.
There are two indicators of relevance here. It’s transaction volume and social dominance. The first of these, transaction volume, tracks the total amount of tokens (in USD) involved in transfers on the LTC network.
A high value of this indicator means that investors are participating in a large amount of trading activity related to that asset. This trend is considered to indicate that there is currently a high level of interest in LTC. On the other hand, a low indicator may suggest that investors may not be paying much attention to the cryptocurrency as they are not moving large amounts of money.
Below is a graph showing the trend of Litecoin trading volume over the past few months.
The value of this metric seems to have skyrocketed over the past few days. Source: Santimento of X
As shown in the graph above, Litecoin’s trading volume has recently spiked, meaning that activity on the network is increasing. So far, this indicator has set a peak of $3.97 billion, the highest level since June 2023.
Generally, a large amount of network activity leads to fluctuations in the price of a cryptocurrency. However, since trading volume only measures the pure amount of transfers taking place on-chain and does not include information about the split between buys and sells, this new price action will move assets in either direction. Possibly.
In this case, however, the surge in activity was followed by a rise in asset prices, suggesting that investors are participating in the accumulation.
The second metric in the graph, Social Dominance, shows the percentage of total social media discussions related to the top 100 coins by market cap that are solely contributed by Litecoin.
From the graph, it is clear that LTC social dominance has also increased recently, with discussions related to the coin accounting for around 1.1% of the total sector.
This suggests that average traders are starting to pay attention to cryptocurrencies. Retail interest could drive prices higher, but fear of missing out (FOMO) has historically led to high price ceilings, so we may need to be wary of excessive amounts.
LTC price
Litecoin approached the $75 level early in the rally, but it appears to have since pulled back and is now back at $72.5.
The price of the coin seems to be on an upward trend in recent days | Source: LTCUSDT on TradingView
Dall-E, featured image from Santiment.net, chart from TradingView.com
