Litecoin’s price breaks above $106 for 1st time since July 2023; More gains ahead?

The price of Litecoin hit a high of $106.2 on March 29, which is its highest point in the past eight months. Mining activities and market speculation indicate that there could be further price increases in the future.

On March 29, Litecoin stood out as the top gainer among the leading 20 cryptocurrencies, recording a 12% price increase in just 12 hours.

The patterns in on-chain data provide insights into the major factors fueling Litecoin’s recent price surge, as well as the investment strategies of speculative traders, who are currently placing wagers on LTC for the near future.

Litecoin miners leading the rally

Since the third Litecoin halving on August 2, 2020, the cryptocurrency’s value has been declining significantly. In the aftermath of the halving event, miners and other key contributors sold off their LTC holdings, causing the price to plummet to a two-year low of $57 within just two weeks.

After that point, LTC hadn’t been able to regain the $100 mark until the market shifted positively in March 2024.

On March 29th, Litecoin’s price surpassed $105. Over the past month, this cryptocurrency has experienced a significant increase of 33.5%. Important mining data indicate that miners have played a crucial role in fueling Litecoin’s recent price surge.

The chart by IntoTheBlock shows in real time how many coins are currently being held by well-known miners and pools for mining.

Litecoin’s price breaks above $106 for 1st time since July 2023; More gains ahead?

In March, Litecoin miners amassed approximately 150,000 LTC coins, increasing their holdings from around 2 million LTC on February 29 to over 2.2 million LTC as of March 29 (when the data was last obtained).

At present values, the recently obtained 150,000 Litecoins amount to around $16 million. The substantial growth in miner holdings over the past month has noticeably boosted the cryptocurrency’s price trend.

When miners shift into accumulation mode, they limit the number of new Litecoin coins entering the market, creating more opportunity for optimistic buyers to take control. This trend suggests that miners have faith in LTC‘s price growth in the near future and prefer to save their coins instead of selling them immediately.

It is believed that when the reward for mining new Bitcoins is cut in half on April 20, some miners who are currently operating at a loss may shift their focus to other Proof of Work cryptocurrencies, such as Litecoin.

Essentially, LTC miners might continue stockpiling reserves, anticipating that the upcoming Bitcoin halving may lead to advanced developments within the Bitcoin network and potentially cause a surge in Litecoin’s value.

After 33% gains, LTC price still undervalued

On March 29, Litecoin’s price increased by 12%, resulting in a total gain of 33% for the month so far in 2024. Despite this significant rise, the value of Litecoin seems relatively low compared to recent investments in its derivative markets.

The chart below from Coinalyze shows the current value of all open derivative contracts for a particular cryptocurrency. This information reveals the quantity of funds invested in these contracts, which encompasses both futures and options. As such, it is an essential tool for understanding market sentiment and predicting possible price fluctuations.

Litecoin’s price breaks above $106 for 1st time since July 2023; More gains ahead?

Examining the graph, there was a $104 million boost in LTC‘s open interest between March 29th and earlier, indicative of new investments totaling $104 million from speculative traders.

Significantly, the LTC price has increased by 12% within the past 12 hours. However, what truly stands out is the substantial rise of 42% in open interest during this same time frame.

If the number of open contracts increases faster than price movements during a potential price breakout, traders are often hopeful that the uptrend will continue. This is indicated by their actions to buy new contracts or increase existing holdings.

Litecoin price forecast: $150 before Bitcoin Halving?

Based on the miners amassing $16 million and the investment of $144 million in Litecoin derivatives, it’s likely that Litecoin’s price will increase, approaching the $150 mark, before Bitcoin undergoes its halving event in April 2021.

Despite this, bulls encounter a significant resistance point around $130 for selling LTC. According to IntoTheBlock’s analysis of global holding data, approximately 571,150 investors previously purchased 8.1 million LTC at the minimum price of $130.81.

Litecoin’s price breaks above $106 for 1st time since July 2023; More gains ahead?

If they’ve been losing money since July 2023, many may choose to sell when they reach even again. But if the bullish trend becomes stronger, there’s a possibility of a significant price increase towards $150.

If the price of Litecoin falls below $90, bears may gain control in the markets once again. However, given the current trend of speculative investors pouring large sums of money into the market, it’s uncertain if this will happen soon.

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2024-03-29 23:10