Litecoin is showing signs of an impending rally in 2022, which is linked to the number of active addresses, following a pattern seen in 2017. The Reserve Risk and MVRV-Z metrics, on the other hand, indicate an oversold rather than an overbought state, painting a somewhat ambiguous picture for 2022.
Litecoin is exhibiting signs of another bullish trend, closely resembling other bullish trends that occurred in November 2013, when the price rocketed from $5 to $63 in a matter of weeks. In December 2017, the price increased from $50 to $369 due to increased demand. Recent on-chain metrics show an overall upward trend. Since December 2020, the number of addresses has seen an upward parabolic trend, which appears to correlate with the price trend, which has risen from $129.94 on December 31, 2020, to $377.69 on May 12, 2021. The number of active addresses recently increased sharply, similar to what was observed in April 2021. On October 10, 2021, the seven-day moving average indicated a spike in active addresses.
This is comparable to the price of LTC on April 8, 2013, when the number of active addresses reached 16961. On November 12, 2013, the number increased to 18322. Following that, on November 28, 2013, the price increased to $95 USD. LTC rose from $23.50 to a cycle high of $369 on December 17, 2017, after the seven-day moving average of active addresses peaked on May 16, 2017. Other indicators, such as LTC’s reserve risk ratio and MVRV Z-score, paint a different picture, indicating that Litecoin was oversold rather than overbought. An overbought condition indicates that there has been a significant and consistent upward trend with little to no pullback. An oversold state is one in which the price of a coin has consistently declined with little correction. There have been two occasions when the Reserve Risk signaled an overbought condition, and a rally ensued. The Reserve Risk is currently less than 0.003, indicating an oversold condition. The MVRV Z-score is a method of determining whether litecoin is undervalued or overvalued in terms of its fair market value over time. The current MVRV Z-score is greater than two and must exceed seven to be considered overbought.
A quick look at the price of Litecoin over the last four years.
Historically, 2016 was the least eventful year for price movement, with the price rising by only 27% to $4.36 at the end of the year. 2017 was the most bullish year in the history of Litecoin’s price, with bullish candlesticks appearing almost every month. It had risen 5451 percent by the end of the year. Litecoin had a bearish finish to each month in 2018 and fell to $30.62 by the end of the year. The year 2019 began with a high of $146.95, but it eventually ended with only a 33.7 percent increase.
Litecoin’s market cap was approximately $13.3B at the time of writing, and its price was $188.79.
Bitcoin vs. Litecoin
BitPay recently added support for Litecoin, and it is now accepted at AMC theaters. In 2011, Litecoin was created as a fork of Bitcoin. Litecoin, like bitcoin, is a deflationary currency with a maximum of 84 million coins that can be minted. Litecoin has a faster block time of 2.5 minutes than bitcoin, which is 10 minutes. Litecoin’s validation method is less complex than bitcoin’s, despite the fact that it also employs Proof-of-Work.