- LTC’s MVRV ratio (30d) crossed the 30% mark on July 2.
- Historically, this is often followed by a drop in the value of LTC.
Litecoins [LTC] double-digit price rally over the past week has pushed the market value to realized value (MVRV) ratio above 30% on a 30-day moving average, a position often marked by a decline in the price of LTC.
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On a Twitter after made on July 4, crypto analyst Sumit Kapoor noted that since 2018, every time LTC’s MVRV (30d) crossed the 30% mark, the price of LTC fell by an average of 41%.
𝐀𝐓𝐓𝐄𝐍𝐓𝐈𝐎𝐍 𝐋𝐈𝐓𝐄𝐂𝐎𝐈𝐍 𝐇𝐎𝐋𝐃𝐄𝐑𝐒
#Litecoin MVRV 30D has reached the 35% level which has historically been very bearish for the $LTC price.Whenever this level has crossed the 30% mark since 2018, the price of #LTC has crashed an average of 41% 😨… pic.twitter.com/qUxDEunJC3
— Wise advice by Sumit Kapoor (@sumitkapoor16) July 4, 2023
According to data from Sanitationthis statistic peaked at 36.25% on July 2, after which it trended downwards. At the time of writing, it was positioned at 26.38%.
Switching hands for $105.07 at the time of writing per data from CoinMarketCapshould LTC traders expect a price drop?
Smart money is still present in the LTC market
Operating on a proof-of-work (PoW) network, Litecoin has been steadily building momentum over the past week, with investors and enthusiasts eagerly awaiting the third halve event.
This anticipation caused the network’s native coin to close out the second quarter by marking a local price floor at $85, signaling the departure of “weak hands” and the entry of “smart money” — an event that has since seen a rise of 20% in the value of LTC.
An on-chain assessment of the altcoin’s Network Profit/Loss (NPL) metric confirmed this. This statistic tracks the average profit or loss of all coins that change addresses daily to record periods of profit-taking or capitulation of the holder on the chain.
According to data from Santiment, LTC’s NPL fell to -44.04 million on June 30, after which the price of the alt started to rise. Still on the upside (albeit weakly at press time), the impact of LTC’s smart money business continued to show.
Source: Sentiment
Another important metric to note here is the Age Consumed metric. LTC saw its Consumed Age unexpectedly increase to 438.91 million as of June 30.
This indicated a significant movement of inactive LTC coins to new addresses, signaling a remarkable change in behavior among long-term holders.
Source: Sentiment
Read Litecoins [LTC] Price Forecast 2023-24
It is banal that long-term asset holders are not inclined to arbitrarily transfer their holdings to new addresses. Therefore, a revival of dormant coins is often associated with significant shifts in market conditions and marks a local price floor.
After the age-consumed peak of the LTC, the price rose, indicating that a new bull cycle was introduced ahead of the halving event.
