Litecoin’s price reached an eight-month high of $106.2 on March 29, and recent trends observed among miners and speculative traders suggest further gains to come.
On March 29, Litecoin emerged as the best-performing asset in the top 20 cryptocurrency market rankings after posting a 12% gain in a frenzied 12 hours.
On-chain data trends pinpoint the key drivers of the ongoing Litecoin price surge and how speculative traders are betting on LTC over the next few days.
Litecoin miners leading the rally
The price of Litecoin has been declining since the third halving ended on August 2 last year. Halving selling by miners and other key stakeholders pushed LTC to a two-year low of $57 just two weeks after the Litecoin halving.
Since then, LTC failed to regain the $100 area until market momentum regained strength in March 2024.
The price of Litecoin, which traded above $105 on March 29, is up 33.5% this month. Significant on-chain data trends suggest that miners have played a pivotal role in driving the ongoing LTC price rally.
IntoTheBlock’s charts track real-time changes in the number of coins managed by recognized miners and mining pools.
The chart above shows that Litecoin miners accumulated 150,000 LTC coins in March, increasing the balance from 2 million LTC on February 29 to 2.2 million LTC as of press time on March 29.
At current prices, the newly acquired 150,000 LTC would be worth approximately $16 million. Within 30 days, the miner’s reserves increased significantly, which had a significant bullish impact on the price.
When miners go into accumulation mode, the amount of newly minted coins flowing into market supply decreases, leaving room for optimistic buyers to exert control. This also reflects that most miners are confident in LTC’s near-term price outlook and therefore their overwhelming preference to hold out for future gains.
Additionally, there is widespread speculation that when block rewards for Bitcoin mining are halved on April 20, many unprofitable miners may switch to other proof-of-work (PoW) networks such as Litecoin.
In fact, LTC miners may continue to build up reserves in the hope that the upcoming Bitcoin halving event will strengthen network sophistication and trigger more positive Litecoin price action.
LTC Price Still Undervalued After 33% Rise
The 12% LTC price surge on March 29th would result in a total return of 33% in March 2024. However, compared to recent capital inflows recorded in the Litecoin derivatives market, LTC price still appears to be undervalued.
Coinalayze’s open interest chart below tracks the total value of currently listed active derivatives contracts for specific cryptocurrencies. It provides insight into the amount of capital deployed in derivative positions, including futures and options, and serves as an important indicator of market sentiment and potential price movements.
Looking at the chart above, LTC’s open interest increased from $337 million on March 29 to $481 million. This shows that speculative traders have amassed $144 million in new capital inflows.
But more importantly, in the last 12 hours, LTC price has risen 12% while open interest has surged 42%.
If open interest growth outpaces price action at the start of a breakout, market participants are optimistic that the upward trend will continue, as evidenced by their willingness to build new positions or expand existing positions.
Litecoin Price Prediction: $150 Before Bitcoin Halving?
Extrapolating from the $16 million accumulation wave of miners and the $144 million capital inflow into the LTC derivatives market, Litecoin price is expected to rise towards the $150 level ahead of the Bitcoin halving scheduled for April 20. I see it.
However, bulls now face a looming selling wall in the $130 range. Global fund deposit/withdrawal data driven by pricing data from IntoTheBlock shows that 571,150 existing addresses acquired 8.1 million LTC at a price of at least $130.81.
Considering that it has been maintaining a deficit since July 2023, it is mostly possible to choose to sell at the break-even point. However, if the bullish momentum strengthens, a decisive breakout towards $150 may be possible.
The downside is that if the Litecoin price falls below $90, bears could regain ground in the market. But that doesn’t seem likely in the near term, with speculative traders increasing new capital inflows.