Crypto analytics firm Santiment thinks that Litecoin’s quick run-up to new local highs is putting the asset in treacherous trading territory.
In a new Litecoin (LTC) market update, Santiment is pointing to a few useful metrics for tracking Litecoin’s price action and gauging the network’s overall health.
The analytics firm notes that Litecoin is in the “danger zone” as short-term holders are now in a position to take profits. Santiment uses the market value to realized value (MVRV) seven-day indicator, which shows the average profit/loss of all the coins currently in circulation according to the current price.
“LTC’s MVRV 7D which measures the short-term profit/loss of holders is showing that we are in the danger zone, as all short-term holders are in the profit at the moment – which could incentivize them to take some profits.”
In September, LTC was sitting at a month low price of $140 before rallying more than 100% off that level to a new local high of $295. At time of writing, LTC is trading at $246.79.
Santiment also notes that Litecoin’s price appears to have caught up with Bitcoin’s (BTC) relative gains since the market lows of September.
“One interesting thing to note is that LTC’s price mirrors very closely to BTC’s…This also means that LTC isn’t exactly a strong altcoin as it didn’t show any strength when BTC dumps, it’s mainly BTC dragging it along.”
Although Santiment expects Litecoin to consolidate, the crypto insights firm says that one on-chain metric is signaling strength for the LTC network.
“LTC’s Daily Active Addresses’ been rather consistent and growing over the past 3 months (even despite the major dip in September), which is great as this is what we want to see in a healthy network. It recently saw a spike in DAA as price spiked (naturally so) and has not seen any major drop yet, so far so good.”
You can read the full report here.
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The post Analytics Firm Santiment Warns Litecoin Is in a Danger Zone After Price Spike appeared first on The Daily Hodl.
