Digital silver is rallying, but “bullish” metrics might play cruel joke on LTC holders
A rally in digital silver was the last thing the cryptocurrency market could have expected. However, in less than a month, the price of Litecoin has skyrocketed to $83. All of this happened during a time of severe pressure on the market, which is crushing the performance of most digital assets in the space.
Santiment names reason
The jump above $83 and the big 8% surge was mostly fueled by the movement of dormant tokens in large wallets that have been accumulating and holding LTC for the last few months. According to the on-chain data provided, it was the largest dormant token movement tracked in four years.
However, sentiment analysis can be confusing: the movement of large assets on the network should not provide any additional support to the coin’s value as it does not provide any funding for the bulls who are trying to push the asset’s price upwards. are willing.
Historically, the movement of dormant coins has been a sign of an upcoming surge of selling pressure on the market. However, the logic behind Santiment’s analysis does not rely on the direction of the aforementioned assets.
Increasing activity on inactive wallets could be a sign of a cycle shift: from accumulation to distribution. We saw similar network behavior in September-November 2021, when bitcoin reached an all-time high and inactive wallet activity increased rapidly.
Considering the number of LTCs that have not moved since the cryptocurrency market rally back in 2017, Litecoin might be miles away from the local top and will still show us unprecedented strong performance while battling one of the worst market conditions in the industry’s history.
