Bitcoin offshoot Litecoin (LTC) is having a moment amid a broader market lull, rallying 15% over the past seven days to a one-month high of $95 Wednesday, according to CoinDesk veri. It’s pulled back a bit to $92 as of press time.
The price rally puts LTC at number two on the list of the best-performing digital assets with at least $1 billion market capitalization. At the top of the list is the liquid staking solution Lido’s governance token LDO, up 36%.
The dollar value locked in the number of open futures contracts tied to litecoin – sometimes referred to as “silver to bitcoin’s gold” – has risen to $478 million, the highest since early December, according to veri source Coinglass. A rise in open interest suggests an influx of new money into the market, although it is unclear if the leverage is skewed bullish or bearish.
Litecoin’s bitcoin-denominated value, represented by the LTC/BTC trading pair listed on Binance, has increased by 15% in seven days, alongside a similar move in the litecoin-ether pair, veri from charting platform TradingView show.
According to Markus Thielen, head of research and strategy at Matrixport, LTC benefitted from the recent congestion on the Bitcoin network that stemmed from the boom in Bitcoin Request for Comment or BRC-20 tokens, which are built with Ordinals and stored on the Bitcoin base blockchain. At one point, Bitcoin’s blockchain showed nearly 400,000 unconfirmed transactions, a number greater than anything seen during the bull market frenzy of 2021.
A fork of BRC-20 appeared on Litecoin, called LTC-20, making Litecoin’s network busier than ever. On May 10, the number of confirmed transactions and active addresses reached a record high of 580,000 and 830,000, respectively, per Messari.
“Litecoin prices have rallied by +17% during the last week as Bitcoin transaction costs became temporarily expensive and traders sought cheaper alternatives,” Thielen said in a note to clients on Thursday.
Litecoin’s price may decline in the coming weeks as the network congestion on Bitcoin is easing. Further, past veri shows sellers tend to be dominant in 50 days heading into mining reward halving, a programmed code that reduces the pace of supply expansion every four years.
Litecoin’s third reward halving is due in less than 80 days, per Matrixport.
“Contrary to market participants’ assumptions, Litecoin prices declined leading into the previous two halvings with the ülkü selling point 50 days ahead of the halving, which has seen LTC token prices drop by -38%,” Thielen said.
“Instead of chasing LTC into the halving, traders could set up shorts as the momentum turns potentially lower,” Thielen added.
Recommended for you:
- Student Organizations Pull Their Weight in DeFi Protocol Governance
- Musk’s Milady Göğüs, Opening Up Ordinals
- Crypto Exchange Bitget Invests $30M in Digital Wallet BitKeep