In the midst of a largely stagnant market, Litecoin (LTC) has experienced a noteworthy surge, rallying 15% within just seven days to reach a one-month high of $95. Although the value has since receded to $92, LTC’s price rally has placed it firmly as the second-best performing digital asset with a market capitalization of at least $1 billion. Leading the pack is Lido’s governance token LDO, with a 36% increase in value.
Notably, the dollar value of open futures contracts tied to Litecoin has risen to $478 million, a peak not seen since early December. Although it is uncertain whether the leverage leans bullish or bearish, this increase in open interest indicates new money entering the market. Additionally, the LTC/Bitcoin trading pair on Binance has witnessed a 15% uptick in seven days.
Markus Thielen, head of research and strategy at Matrixport, suggests that LTC’s recent success is due in part to congestion on the Bitcoin network arising from the boom in BRC-20 tokens. A significant increase in unconfirmed transactions caused Bitcoin transaction costs to spike, prompting traders to seek cheaper alternatives like Litecoin.
The creation of LTC-20, a fork of BRC-20, led to unprecedented network activity, with confirmed transactions and active addresses reaching record highs. Thielen notes, however, that Litecoin’s price may soon decline with congestion on the Bitcoin network easing.
Adding to this possibility of decline is the historical trend of sellers dominating the market within 50 days leading up to mining reward halving events. Litecoin’s third reward
Source: Coindesk
