Key Takeaways:
- Litecoin introduced the LTC-20 token standard, which prompted a surge in active address numbers.
- LTC price rallied over 13% in seven days
NEW DELHI (CoinChapter.com) — The Litecoin (LTC) market has witnessed a renewed investment interest after the launch of its new token standard called “LTC-20.”
Litecoin, sometimes considered the silver to Bitcoin’s (BTC) “digital gold,” likely took inspiration from the success of Bitcoin’s BRC-20 token standard. The update helped the LTC price rally upward.
Moreover, similar to BRC-20, the LTC-20 opens up possibilities for creating and managing fungible tokens, smart contract capability, and dApps. Litecoin has launched an NFT collection, Litecoin Punks, on the ordinals market.
A software engineer adapted the Ordinals protocol for Litecoin in Feb 2023, helping make digital collectibles possible on the Litecoin blockchain.
Recently, the transaction count on the Litecoin blockchain hit a record high, noted on-chain analysis platform Santiment in a note. Furthermore, the number of active addresses on Litecoin reached a new record high in May.
Active addresses refer to unique addresses on the Litecoin blockchain. Moreover, Santiment noted that smaller wallets grew “rapidly in tandem with the increase in active addresses,” suggesting that the hype around the LTC-20 was the likely reason behind the surge.
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Additionally, Santiment speculated that the hype surrounding Litecoin would likely increase with a halving event approaching.
While we cannot predict the exact direction of the market, the current trends and potential influence of LTC20 on Litecoin’s active addresses are certainly worth monitoring
Santiment stated
Moreover, Santiment noted that network congestion on the Bitcoin blockchain forced users to look for cheaper alternatives. The congestion even forced Binance to pause BTC withdrawals.
As a result, stablecoin and the Lightning Network emerged as popular choices for users looking to “transfer value over the blockchain,” Santiment observed in a note. Litecoin, a rival PoW blockchain derived from a Bitcoin source code fork, also gained users’ favor.
LTC Price Moving Inside Bullish Triangle Pattern
LTC price is moving inside a bullish technical pattern called the ‘Ascending Triangle.‘
A horizontal trendline that connects swing highs and an ascending trendline connecting swing lows forms an ascending triangle pattern. Volume helps determine if a breakout is strong.
In an ideal world, buyers would enter the market as the trendlines close the gap, pushing prices above horizontal resistance with heavy volumes. Unfortunately, a low-volume breakout on the upside will likely fail, resulting in a pullback.
Per the rules of technical analysis, the price target for a breakout is equal to the triangle’s height at its thickest point. Therefore, LTC might rise 195% to $257 if the Litecoin token confirms the pattern.
Litecoin Price Rallies Over The Past Seven Days
Increased investor interest saw the Litecoin token price rally over 13% since May 9 to form a daily high near $88 on May 15. However, bulls struggle to break and close above the 50-day EMA (purple wave) and 100-day EMA (blue wave) resistance confluence.
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If the resistance confluence rebuffs the LTC price rally, the Litecoin token price could drop to its 20-day EMA (red wave) support level near $85. Moreover, a further downtrend could result in the LTC price dropping below the 200-day EMA (green wave) support and reaching $79.7 before recovering.
Meanwhile, LTC’s MACD has formed a bullish crossover. The pattern forms when the MACD line (difference of 12-day and 26-day EMA) moves above its MACD signal line (9-day EMA of MACD). Traders often consider the pattern an indicator of a bullish trend reversal.
Therefore, as buyers enter the market, the LTC price might break above the resistance confluence to reach resistance near $90.7. Moreover, breaking and holding above the immediate resistance would increase confidence in token’sen’s price action.
As a result, the LTC price could target the resistance near $97 before retreating.
