Litecoin [LTC] was showing some promising signs of growth, particularly in its price action, which was bouncing off major support. All the more reason to monitor its performance and what is going on-chain.
The upcoming Litecoin halving scheduled for August is expected to be the network’s most significant event. As a result, anticipation for this event has grown. But how much of an impact will this event have on the price of LTC? Previous halvings may give us an idea of what to expect.
According to BlockchainSanta’s analysis, Litecoin could see a 200% increase in the days leading up to the halving. This forecast is based on LTC’s previous performance during halvings. If Litecoin continues to perform as well as it has in the past, it could be worth more than $250.
The most recent price action for LTC indicated that the rally has already begun. Its press time price of $89.27 represented a 17% increase from its four-week low. More importantly, the bounce occurred following contact with an ascending support line.
Given the excitement surrounding the halving, there was a good chance that LTC would deliver that 200% upside in the coming weeks. Some of Litecoin’s on-chain metrics clearly demonstrated this. Daily active addresses, for example, have been increasing since the beginning of May. Similarly, on-chain volumes have increased in the last few days.
Long-term holders purchased the majority of the coins, according to on-chain data. For example, the average coin age of LTC has been steadily increasing over the last four weeks. This was an important observation because it highlights the increased likelihood of higher local lows. However, it does not guarantee that there will be no short-term sell pressure.
Despite the higher mean coin age, Litecoin’s MVRV ratio confirmed that there has been significant short-term profit-taking over the last four weeks. It also represented the price action more accurately.
Since May 8, the MVRV ratio has been on an upward trend, indicating that the majority of traders who purchased LTC since then have been profitable. Based on the observations above, Litecoin holders are shifting to a long-term perspective, which may continue to favour the bulls in Q2.