The Litecoin network has been around for almost a decade now and recently, the fundamentals of the network have shown strong growth that could catapult the valuation of the coin. A source code fork of the Bitcoin Core client, its value proposition has been a bone of contention. Over time, the network has seen significant traction, and transactions on the blockchain of Litecoin have risen steadily.
According to data gathered from BitInfoCharts, transaction figures surged all the to 54.52k. The last time the figures touched and surpassed this level was in November 2019. This was followed by a brief decline in the price of the coin before shortly before the 2020-high wherein LTC reached $81-level.
Highlighting a potential breakout in the inkling, Franklyn Richards, the Founding Director of the Litecoin Foundation stated,
“We have not seen sustained network usage at this level since the beginning of 2018, the main difference being back then price was incredibly over valued according to TX:Price ratio, likely indicating that the network has adequately matured 3 years on to hold these prices.”
Richards further noted that if the breakout materializes, Litecoin will be left with two, the first being at $81 and the second at $140.
The silver crypto’s downward spiral started after the second block reward halving which occurred in August 2019. The drop in hash rate led to miner capitulation following which the price took a severe downturn.
Miners return to the network
A year later, the hashrate appeared to be making a comeback. On the 2nd of August, the hash rate rose to a 10-month high of 292.19 TH/s. This was significant primarily because it indicated a rising positive sentiment among the LTC miners and could subsequently result in its price mimicking the upward trend.
Accompanying the latest rise in the hash rate, was its difficulty which also noted an uptick.
The mining profitability, which has been on a decline for quite some time now also hinted on a potential trend reversal which was another positive sign for the Litecoin Network.
Rise in DAA
BitInfoCharts’ latest data also depicted an increase in the number of unique [from or to] addresses per day. For quite some time, a strange network activity forming an unusual spiking pattern was formed on Litecoin addresses.
Termed as the Dust attack, this was first identified on Litecoin by James Jager, Project Lead at Binance Academy.
A dust attack is when a malicious entity sends the smallest denomination of crypto [1 Litoshi] to the target wallet. Since the amount of the crypto sent is negligible, it often remains obscure and the victim fails to notice any transfer. These entities send the cryptos to track the fund movements of the victim.
On a positive note, the active address figures have been steadily increasing which is another positive development for the Litecoin community.
Breakout imminent?
Litecoin hasn’t been performing well for a long time which led to its fall from being the fifth-largest crypto by market cap to two places lower in less than a year. However, the aforementioned network activities are certainly giving food for thought.
$LTC / $BTC is ready to breakout of a multi-month falling wedge$LTC / $USD is ready to break a multi-year down trendline
Litecoin is likely to dominate this market for the coming weeks, make sure you're ready for it. pic.twitter.com/USHpOq4VuD
— 𝕁𝕁𝕔𝕪𝕔𝕝𝕖𝕤 🔄 (@JJcycles) August 16, 2020
And a popular crypto analyst asserted that a breakout in the offing could be real. In another separate tweet, crypto analyst and Bitcoin trader ‘Nebraskan Gooner‘ revealed that LTC/BTC trading pair had a downward break and with high trading volume, as per his proprietary technical indicator ‘Top Goon X’ signaled an upside potential which would lead Litecoin to outperform the king coin in the near future.
If the current trends persist, Litecoin could retrace its steps to climb to a triple-digit value in the coming months.
