Over the past few weeks, the price of Litecoin (LTC) has seen a significant increase, with a recent rally of more than 6.5% on May 15, pushing the price to around $87.50. This surge has outperformed other top-ranking crypto-assets such as Bitcoin (BTC) and Ether (ETH). In fact, LTC’s price has risen by 115% since its low of $40.25 in June 2022.
One of the driving factors behind Litecoin’s growth is the introduction of its new token standard, LTC-20, a forked version of Bitcoin’s BRC-20, on May 2. This development allows users to mint nonfungible tokens (NFTs) on the Litecoin blockchain using its native Ordinals protocol.
As a result of the new standard, Litecoin network activity has skyrocketed, with the total number of daily on-chain transactions reaching over 576,700 on May 9, according to BitInfoCharts.com. Even though this number has since dropped to 511,290 as of May 14, it remains significantly higher by historical standards.
Moreover, the total number of active addresses on the Litecoin network has increased substantially following the introduction of the LTC-20 standard, as evidenced by Santiment’s data. The smallest group of wallets, holding between 0 and 0.001 LTC, has seen rapid growth in tandem with the increase in active addresses. This suggests that LTC-20 could indeed be the driving force behind the heightened activity on the Litecoin network.
However, not everyone is enthusiastic about the new development, as the number of Litecoin whales — entities holding more than 1,000 LTC in unique addresses — has dropped, showing relatively less interest in the LTC-20 token standard.
But what does this mean for the future of LTC’s price? The increased network activity indicates a rising demand for LTC, which could be a factor behind its recent price gains. Additionally, the upcoming halving event for Litecoin in August has further bolstered its upside prospects.
From a technical perspective, LTC is breaking out of its multi-month descending channel range to the upside. If the support on the channel’s upper trendline holds, the price could reach $130 by August, a 50% increase from current levels. However, if it fails, the price may drop back into the channel range and potentially fall to $25, which would be around 70% lower than its present value.
As always, every investment and trading move carries risk, so it is crucial that readers conduct their own research when making decisions.
Source: Cointelegraph
