Litecoin’s price movement more or less mirrored the dynamics of the broader cryptocurrency market in July. It is worth noting, however, that the viola’s loss margin was much lower than some of the other major altos on the market.
Litecoin, after testing its lower long-term support at $ 109, recorded a decent spike (highest in July) in trading volume on July 20. However, trading volumes were still well below the May-July levels. In addition, the altcoin showed growth after fluctuations in the oversold zone.
This exit from extreme oversold conditions and the emergence of buyers in the downturn have contributed to a better outlook for LTC over the past few trading sessions. In fact, on the four-hour chart, the altcoin not only registered a rise in price, but also recovered from the oversold zone.
Are metrics credited with a bullish story?
A recent report from Santiment highlights that despite the recent 13.8% price drop, the number of unique addresses interacting with LTC has grown by 47.5% over the past 10 days. Moreover, recent article also noted that Litecoin ranked third on the sentiment charts last week, scoring 33 points in the top five.
Since LTC on the LTC / BTC chart returned to support after the rejection of the 4200 sat level, the possibility of further decline is not ruled out. However, LTC has registered a small profit and if this continues, the altcoin could recover. At the same time, its MVRV ratio for 365 days was -39%, almost at the same level as the 2019/2020 bottom. The report goes on to say:
“From a historical perspective, there is even more room for reverse development, but it will be interesting to see if -40% confirms in the coming days as a de facto ‘return zone’.”
Moreover, addresses with LTC 1,000-100,000 increased their holdings by LTC 270,000.
However, given low trading volumes, lower social sentiment and weak alt dominance, it is still too early to conclude that Litecoin has fully recovered.
So, does this mean Litecoin looks healthy?
While most of the metrics described above have painted a pretty healthy picture for Litecoin, it should be borne in mind that in the case of alts, their development activity and social dominance also play a huge role in their rally.
On July 16, there was a decline in the development activity of LTC. And even though it was much higher than the April level – July, it was still much lower than the April ATH. Social dominance for the coin wasn’t looking good either, and has registered a downturn at the time of writing.
At the moment, Litecoin is a more neutral outlook than a bullish outlook. However, if the healthy spike in daily addresses continues to grow, it could prove beneficial to the web. At the same time, sustained growth would be a rare example of the strength of the network among top cryptocurrency companies.