On-chain data shows that Litecoin recently recorded its highest weekly volume since May 2023. Here’s what this could mean for the asset’s price.
Litecoin transaction volume has been on the rise recently
In new mail On “Transaction volume” here refers to an on-chain metric that tracks the total amount of Litecoin involved in transactions on the network each day.
When the value of this metric is high, it means that users are transferring large amounts on the blockchain. This trend means that trading interest in the asset is high among investors.
On the other hand, a low index indicates that holders may not be paying much attention to the cryptocurrency because they are not doing a lot of transfers.
Now, here’s a chart showing the trend in Litecoin transaction volume over the past few months:
The value of the metric appears to have been rising in recent weeks | Source: @MillaLiraj on X
As shown in the chart above, Litecoin transaction volume has seen growth recently, indicating that users are engaging in an increasing amount of activity. Over the past week alone, the network has seen movements of 512.8 million LTC, worth approximately $35.4 billion at the cryptocurrency’s current exchange rate. This means that the chain is seeing, on average, more than $5 billion in volume per day.
In general, a high amount of network activity is something that can cause the price of an asset to fluctuate, as all of these simultaneous movements can provide the fuel that sharp moves require. However, any such fluctuations arising from this, could go in either direction. In fact, Litecoin has been declining over the past few days, so this recent high volume may correspond to selling activity.
However, what can be constructive is the fact that the metric has been on an upward trajectory for a while now. This may suggest that the activity is not a reflection of some fad, but rather organic growth.
Litecoin is known for its cheap and fast transactions, so the cryptocurrency has historically tended to perform well in terms of metrics related to network activity. It seems that this quality is still able to attract user interest.
As for how LTC fits into the bigger picture, market intelligence platform IntoTheBlock shared a chart comparing transaction volumes for major coins in the sector.
Looks like stablecoins are on the top of the list | Source: IntoTheBlock on X
USDT and USDC stablecoins have dominated the market recently with volumes of $29 billion and $28 billion respectively. Bitcoin trails these assets in third place with $17 billion on the scale.
Thus, although Litecoin has been growing recently, its volume is still less than a third of the size of the original cryptocurrency.
Litecoin price
At the time of writing, Litecoin is trading at around $69, down more than 2% over the past week.
The price of the coin appears to have been heading down recently | Source: LTCUSDT on TradingView
Featured image by Dall-E, IntoTheBlock.com, chart from TradingView.com