Most altcoins have rallied well in the past few weeks due to Bitcoin’s surge above $ 50,000. Litecoin, the cryptocurrency that ranks 16th in terms of market capitalization, also appreciated in the charts, posting gains of 38% in August alone.
While there has been a strong historical correlation between the price action of Litecoin and the movement of the king coin, this Litecoin rally seems to have a different potential.
Exciting price promotion
Litecoin encountered major resistance at $ 190 on the daily chart. In fact, it has been struggling just below this level since mid-August. Noteworthy, however, are seven straight green candles that have lined up in the 4-hour timeframe for the past few days. That was last seen in late May after Litecoin rose from a nearly 4-month low.
Additionally, Litecoin has hit higher lows – A good sign of an ongoing rally and a constant northbound trajectory. LTC appeared to be forming an ascending triangle pattern on the one-day chart as well – a bullish pattern expecting a breakout to the upside.
Block space requirement and more participants
With the altcoin trading just under $ 200 and trading at $ 186 at press time, many are expecting the price of LTC to break out. In the midst of this, a mere spike in Litecoin’s new addresses can be a sigh of relief for the network and its subscribers.
In fact, LTC’s new addresses have increased more than 60% since the end of August.
Another good sign was that the transaction count for Litecoin hit an ATH. The number of transactions provides a proxy for the increasing demand for block storage and signals that the network is growing and in demand. This could also be attributed to the much anticipated upgrade to the MimbleWimble Extension Blocks (MWEB).
According to developer David Burkett, the update should be available by the end of this year. The update is August advance included newly based wallet changes in addition to v0.21, cleaner key / address generation and management and starting the publishing process for 0.21 with Taproot.
Delivery barrier ahead
Amid high anticipation of a breakout above $ 200 for LTC, analyst Ali Martinez pointed out that traders need to be aware of the impending supply barrier when entering long positions.
Notably, the In / Out of Money Around the Price (IOMP) metric on September 1 showed that more than 120,000 addresses had previously purchased nearly 4.70 million LTC between $ 183.35 and $ 188.58. In just one day, however, IOMAP highlighted that Litecoin had overcome all major resistance barriers.
Martinez also noted that it is now only a matter of time before LTC climbs to $ 200 or more as there are no significant supply walls ahead of us.
Finally pFor rice, at press time, the asset was above the 50-day moving average but still below the 200-day moving average. This means that LTC could still face some consolidation before a move is taken.