Litecoin (LTC) has shown signs of life after a rough May, surging over 5.5% in the past 48 hours to reach $85. This rebound comes after a period of decline fueled by investor focus on the Ethereum ecosystem following ETF approvals. But what’s driving Litecoin’s recent price increase?
Miner Accumulation Points to Long-Term Optimism
On-chain data suggests a shift in LTC miners’ behavior as a potential catalyst. Miner reserve charts from IntoTheBlock reveal a significant increase in LTC holdings by miners over the past month. As of June 6th, miners hold a combined 1.93 million LTC, compared to 1.75 million on May 5th, 2023. This represents an accumulation of over 180,000 LTC, valued at roughly $15.3 million at current prices.
This miner buying spree is seen as a bullish signal for several reasons. Firstly, it indicates miners’ belief in LTC’s long-term potential, leading them to hold onto mined coins instead of selling them on the market. This temporary reduction in selling pressure creates a deflationary effect, potentially accelerating price increases.
Can LTC Break Through Resistance Levels?
With a diminished supply of newly minted LTC, the stage is set for a price upswing. This aligns with the recent 6% price jump. Looking ahead, if miners continue their accumulation trend, LTC could potentially break through the $92 resistance zone. However, data from IntoTheBlock’s GIOMAP suggests a potential hurdle at $91.6. Over 1.4 million holders purchased LTC at this price point, and profit-taking at this level could stall the recovery.
Also Read: Top 3 Crypto Moonshots for 2024: Litecoin (LTC), Cardano (ADA)and Polygon’s (MATIC), Potential
External Factors and the Road Ahead
The upcoming US Jobs report on June 7th is another factor to consider. A hawkish report could trigger a price retracement for LTC, pushing it back towards the $76 support level. Conversely, a dovish report could further fuel the bullish momentum.
Overall, Litecoin’s recent price action and miner behavior paint a cautiously optimistic picture. Overcoming the $92 resistance and establishing support above it will be crucial for a sustained climb towards $100. However, external factors like the US Jobs report could introduce volatility in the short term.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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