LTC has fallen 3.74% over the past week. Despite the decline, Litecoin’s on-chain activity has skyrocketed, with 512.8 million moving on-chain.
After a sustained decline, Litecoin (LTC) broke out of the descending channel and showed a temporary uptrend. However, since hitting a local high of $76, the altcoin has experienced a sharp decline.
Despite the decline on the weekly chart, LTC’s on-chain activity surged to a 17-month high.
Litecoin on-chain activity surges to 2023 levels
Litecoin experienced one of its most active weeks in the past year, according to IntoTheBlock data.
Source:X
As such, the Litecoin blockchain saw 512.8 million tokens move on-chain in the past week, amounting to $36.6 billion.
The last time we experienced such levels was in May 2023, when we averaged $5 billion a day. Based on this observation, we show that Litecoin is continuously active with many participants across different platforms.
A spike in on-chain activity typically indicates increased adoption and a growing demand for LTC.
Meaning of LTC price chart
As observed above, LTC is experiencing high demand due to increased chain activity. This suggests that the altcoin is enjoying positive sentiment in the market.
Notably, LTC enjoyed a strong rally last week before falling. In fact, at the time of this writing, LTC was trading at $68.81. This marked a drop of 3.01% in the past day, while the altcoin also fell by 3.74% on the weekly chart.
Prior to this, Litecoin was trending up by 2.47% over the past month.
Although altcoins have fallen over the past week, the overall market remains positive.
Source: Tradingview
For example, DMI has a +DI of 23, which is greater than -DI of 18. This suggests that the uptrend momentum remains positive and is likely to continue.
This phenomenon was further confirmed by the positive Chaikin Money Flow (CMF) of 0.03. This indicates increasing buying pressure and suggests that buyers still have the upper hand.
Source: Santiment
Looking further, the MVRV Ratio Z-Score of 0f -0.3 suggests a good buying opportunity for long-term holders and investors to accumulate. Therefore, dips can cause buyers to enter the market, which increases buying pressure and drives prices higher.
Source: Into the Block
Furthermore, total Litecoin flows decreased from a high of 291,500 to a low of zero. This suggests that flows to exchanges indicating holding behavior are decreasing. Therefore, investors are keeping LTC off exchanges in hopes of rising prices.
Read Litecoin (LTC) price prediction for 2024-2025
Simply put, the surge in on-chain activity suggests that demand for LTC is increasing. With positive sentiment and investor favorability, LTC is well-positioned to regain its monthly trend.
Therefore, if these conditions hold, we will see a return to the $76 resistance level, which faced multiple rejections. Therefore, if the downside continues, LTC will find the next support at $63.4.
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