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Litecoin (LTC) Price Closes to $90: On-Chain Data Raise Concern

Litecoin (LTC) price is up 25% since dropping to a three-month low of $72 on June 14. And with LTC now approaching $90, many on-chain metrics are flashing red flags. Will the bears lead to another price correction?

Proof-of-work networks like Litecoin have scored big wins in recent weeks after SEC court filings called the legal status of several high-profile Proof-of-Stake altcoins into question.

On-chain fundamental data reveals worrying trends as LTC approaches the next major price mark at $90. Here’s how the bears can trigger a potential price correction in the coming weeks.

Litecoin transaction activity down 80%

On-chain data shows that underlying transaction activity did not factor in the recent Litecoin price rally.

First, a month ago, on May 25, LTC recorded 532,000 transactions. At the end of the day on June 26, that number had dropped to 106,000. This represented a whopping 80% drop in transaction activity on the Litecoin network.

More importantly, between June 20th and June 27th, the price of LTC increased by 14%. Meanwhile, the number of deals dropped by 46% over the period.

Litecoin (LTC) Price Correction, June 2023 | The number of transactions. source: IntoTheBlock

The number of transactionsLiterally, it measures the underlying economic activity on the blockchain network by collecting the daily number of confirmed transactions.

When it drops significantly during a price hike, it indicates that the price hike is driven largely by intense speculation rather than organic network value growth.

Unless transaction activity picks up to match the positive price trend, LTC’s continued rally may soon hit a roadblock.

Litecoin network value is declining

Despite the recent price gains, the value of the Litecoin core network appears to be declining. This also confirms the possibility of a downward correction in the LTC price.

The Santiment chart below shows that the ratio of LTC network value to transaction volume has increased by 240% in the past week. On June 20, Litecoin NVT reached 3.75. And as of June 27, it has jumped astronomically to 12.83.

Litecoin (LTC) Price Correction, June 2023 |  NVT ratio
Litecoin (LTC) Price Correction, June 2023 | NVT ratio. source: Emotion

In simple terms, when the NVT percentage increases, as we saw above, it indicates that the price is growing much faster than the underlying transaction activity.

In conclusion, the decline in transaction activity and the upside in the NVT ratio are important metrics that call for caution from bulls.

LTC Price Prediction: Possible correction towards $80

Given the above factors, LTC is likely to enter another bounce below $80 before the bulls regroup to reach $100.

However, LTC will find a lot of support, around the $85 range. In that region, 437,140 investors who bought 1.6 million LTC at an average price of $84.78 can hold out.

But if support is provided as expected, the bears could force a price correction back just below $80.

Litecoin (LTC) Price Prediction, June 2023 |  GIOM
Litecoin (LTC) Price Prediction, June 2023 | GIOM. source: IntoTheBlock

However, if LTC sees a sharp rise in trading activity, the bulls may remain in control and push towards $100. But, as we saw above, LTC price will struggle to break out from the $92 resistance.

The 1 million investors who bought 14.23 million LTC at a maximum price of $91.24 could trigger a pullback. And if the resistance fails to hold, the bulls could rally towards $102 for the first time since April 2023.

Disclaimer

In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.

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