On-chain data shows Litecoin whale transactions have jumped to new highs for 2023 recently. Here’s how this may impact the crypto’s price.
Litecoin Transactions Valued Higher Than $1 Million Have Surged
According to data from the on-chain analytics firm Santiment, the last two spikes led to significant rises in the price. The relevant indicator here is the “whale transaction count,” which measures the total number of Litecoin transactions taking place on the blockchain that involve coins worth at least $1 million.
When the value of this metric is high, it means there are a large number of whale transactions happening on the network right now. Such a trend suggests these humongous holders are actively trading currently.
As the volume of coins involved in transfers like these is very sizeable, a high amount of whale transactions can sometimes cause noticeable effects on the market. Thus, whenever the indicator’s value is high, LTC is likely to see more volatility than usual.
Now, here is a chart that shows the trend in the Litecoin whale transaction counts over the last few months:
The value of the metric seems to have been quite high in recent days | Source: Santiment on Twitter
As displayed in the above graph, the Litecoin whale transaction count has recently spiked and hit the highest values observed since December 28. This would suggest that whales have become active again.
In the chart, Santiment has also marked the trends that the price of LTC followed the last couple of times this cohort showed elevated activity. It looks like the most recent instance was last month when LTC’s price was observing some high volatility.
Following these large number of whale transactions, Litecoin soon formed a local bottom and went on to rally around 33%. Another instance of this trend was during the collapse of the crypto exchange FTX, where once again high values of the metric accompanied significant volatility in the value of LTC. After this instance as well, the crypto enjoyed some sharp uptrend as the price rose to 37% over the next few weeks.
Since the Litecoin whales are active right now, the crypto could soon witness similarly high volatility. Though, which way this volatility may ultimately take the coin’s price is uncertain, as while these whales could be buying right now (which would be bullish), they could just as well be selling with these transactions (naturally a bearish factor).
However, if the last two occurrences of this pattern are anything to go by, Litecoin might just go on to see runs similar to those that followed these previous instances.
In some other news, the LTC mining hashrate (a measure of the total amount of computing power connected by the miners to the network) hit a new all-time high earlier today, which may also prove to be constructive for the price.
Litecoin’s Hashrate hit an all time high today!
— Litecoin (@litecoin) January 26, 2023
At the time of writing, Litecoin is trading around $89, up 11% in the last week.
Looks like the value of the asset has gone stale in the last few days | Source: LTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Santiment.net