Litecoin: Fresh rally pushes LTC Price towards resistance zone, but can it break out of it?

KEY TAKEAWAYS:

• Litecoin recently underwent a strong 10%+ rally on 2 November, 2022.
• This rally has pushed LTC price very close to a resistance zone and a breakout about which can bode well for the crypto.

Litecoin is an open-source global payment network which is not controlled by any central authority. It is a Bitcoin fork, created to gain an upper hand in mining, by a former Google engineer Charlie Lee. Lee referred to Litecoin as the Lite version of Bitcoin as it works on the mechanism that the star crypto works but with upgraded features. 

It reduced the finality time for the transactions compared to that of Bitcoin but has increased the total supply to 84 million. Both the platforms use the exact consensus mechanisms but Litecoin uses a different hashing algorithm like Scrypt which is more memory-intensive and slower than SHA-256 which is used by Bitcoin. 

Recent Updates:

• MoneyGram, the leader in digital payments enabled its users to buy, sell, and trade cryptos which include Litecoin along with other popular tokens

As I mentioned during the Litecoin Summit 2022 keynote, adoption is the most important thing for Litecoin. So I'm extremely excited to be able to use @MoneyGram to buy Litecoin now! Thanks @Coinme for making this happen.

P.S. Yes, Litecoin is still alive to answer the haters 👇 pic.twitter.com/PI31vbhAqW

— Charlie Lee Ⓜ️🕸️ (@SatoshiLite) November 2, 2022

• Meanwhile, blockbankers, a DeFi & CeFi powered App listed Litecoin and enabled the purchase of the token along with BTC, ETH, USDT, etc

🚨BREAKING: blockbankers can now buy & trade $LTC on the blockbank app CeFi side! @litecoin, welcome on board! 🚀🥳
App users can purchase $LTC with $BBANK, $BTC, $ETH, $USDT, and EUR.
Head to the app -> https://t.co/uva6Dmf0Xw pic.twitter.com/eAYoFmxbge

— blockbank (@blockbankapp) October 26, 2022

LITECOIN TECHNICAL OVERVIEW

Source: Tradingview

• The Litecoin price fell below the trend line in September and has yet to regain the lost ground.
• Meanwhile, the recent upswing not only helped the price regain the levels but also placed the trade at the apex of the consolidation, putting it closer to a significant breakout.
• The token is expected to test the resistance zone between $64.05 and $66.14 in the coming hours and hover within the levels until it receives a bullish push to break through the levels.
• Furthermore, a significant push could push the price past the critical levels near $70 and into the pivotal levels at $73.36.

Read more: Litecoin Price Prediction

Healthy NVT Ratio levels

Litecoin NVT Ratio | Source: Santiment

The Network value to transactions (NVT) ratio highlights the relationship between the market cap and the transfer volume over a given period. It is also known as the crypto’s Price-to-Earnings (PE) ratio. If the value is high, the network is overvalued, with limited ability to transact coins, which eliminates the possibility of a price bubble forming. Overall signifies a bearish trend, meanwhile, a lower value indicates a bullish trend. 

The NVT ratio has been hovering around predetermined levels and appears to have dropped significantly recently. As the token’s value falls from around 6 to 2, it indicates that LTC is being valued reasonably and further dips in price is unlikely, thus boding well for rallies in the near future.

Social Dominance on the downward slide

Litecoin Social Dominance | Source: Santiment

The social dominance of crypto indicates the market participants’ interest in the asset. The metric indicates whether or not the crypto-verse is discussing the token, particularly when market sentiments are bullish. It could be discussions on social media platforms, carrying out engagements, and so on.

Interestingly, Litecoin’s social dominance has been severely hampered, and as is evident from the chart above, it has fallen significantly since June 2022. While this may help to keep its price stable, it could also suggest that recent rally we saw in this coin might as well be short lived. So investors should be careful before falling prey to FOMO in the market.

Development Activity on the rise!

Litecoin Development Activity | Source: Santiment

The development activity describes the project’s strength, which is dependent on the development team behind the project. A strong team with rising development activity frequently attracts market participants to gain confidence in the project. As a result, rising development activity may be regarded as bullish, potentially fueling a significant upswing.

Litecoin’s development activity has been volatile in the last 30 to 45 days after being largely stagnant for a long time. Currently, activity is on an increasing incline, indicating the possibility of network upgrades, which could further increase the price. 

Conclusion

Litecoin has been undervalued for a long time, as it has maintained a downward trend despite being one of the most older generation of crypto tokens. However, the recently resumed development activity can be expected to improve the platform in the coming days. Furthermore, rising development activity and a drop in NVT with social dominance point to the resurgence of bulls. As a result, a significant upswing may be on the way, bringing the price even closer to a three-digit value very soon. 

Prices as on 3 November, 2022.