Litecoin’s price action in July more or less mirrored that of the broader cryptocurrency market. It is noteworthy, however, that the old’s margin of loss was much lower than some other large alts on the market.
Litecoin saw a decent spike (highest in July) in trading volume on July 20, after testing its lower long-term support at $ 109. However, trading volumes were still well below their May to July levels. In addition, after oscillating in the oversold zone, the altcoin showed an uptrend.
This emergence from extremely oversold conditions and the emergence of dip buyers encouraged better prospects for LTC in recent trading sessions. In fact, on the 4-hour chart, the altcoin not only rallied, but also rebounded from the oversold zone.
Do Metrics Make a Bullish Narrative?
A recent Santiment report highlighted that despite a recent price drop of 13.8%, the number of unique addresses that interact with LTC has increased 47.5% in the last 10 days. also new article also pointed out that Litecoin was third in the top 5 on last week’s sentiment charts with a score of 33.
Since LTC is back on support on an LTC / BTC chart after the rejection of the Sats level of 4200, the possibility of a further downward movement is not excluded. LTC posted some minor gains, however, and if this continues, the altcoin could see a rebound. In the midst of this, the 365-day MVRV ratio was -39%, almost at the same level that marked the 2019/2020 low. The report went on to say
“Historically, there is still more headroom for the downward move, but it will be interesting to see if -40% is confirmed as a de facto bounceback zone in the coming days.”
In addition, addresses with 1k – 100,000 LTC have increased their inventory by 270,000 LTC.
However, given the low volume of trade, lower social sentiment, and the lackluster dominance of the old, it’s too early to conclude that a full recovery is underway for Litecoin.
Does that mean Litecoin looks healthy?
While most of the metrics spotted above painted a pretty healthy picture for Litecoin, it cannot be ignored that in the case of Alts, their development activity and social dominance also play a massive role in their rallies.
LTC’s development activity declined on July 16. And while it was well above its April-late-July levels, it was still well below its April-ATH. The social dominance of the coin didn’t look too good either, and was trending downwards at the time of writing.
At this point in time, Litecoin is offering a more neutral than a bullish outlook. However, if the healthy increase in daily addresses continues to rise, it could prove to be good for the network. Sustained growth would be a rare example of the network strength among the top caps of crypto.