Litecoin price stabilizes as its correlation with Bitcoin reaches 0.88

0
5

The price of Litecoin has had a remarkable bull run in recent months. As of June last year, Litecoin is up more than 90%, while BTC is only up 1%. The spread between the prices of the two popular proof-of-work coins has been widening. It soared to a high of $93 this month, the highest since May 9. It is up more than 100% from its 2022 low.

Correlation between Bitcoin and Litecoin

It’s not clear why Litecoin and Bitcoin’s correlation has separated in recent months. In the past, the two, along with Bitcoin Cash, have had one of the closest correlations. This means that they all followed each other.

According to Into the Block, the correlation between the two dropped from 0.92 to a low of -0.17 on Nov. 7. Lately, however, this correlation figure seems to be getting close as it stands at 0.88. A correlation coefficient close to 1 is usually a sign that the two assets are moving in the same direction.

ALSO READ  These are the 6 highly adopted fintech trends in 2023

A likely reason for the outperforming Litecoin price is that on-chain numbers have been relatively strong in recent months. Mining activity in particular has been quite strong, with the hash rate rising to all-time highs. Hash rate is an important number that measures the health of a network. A higher number is a sign that the activity is doing well.

Another on-chain statistic is that historical volatility has dropped in recent days. It peaked at 106% in November and then fell to the current 42.6%. In fact, a closer look at the chart shows that this volatility slump started when the coin started to gain strength. A lower volatility number is usually a bullish signal for an asset.

ALSO READ  Porsche halts NFT coin amid community backlash

Litecoin price prediction

LTC chart by TradingView

The daily chart shows that the LTC price has been in a strong bullish trend for the past few months. As it ascended, the coin formed an ascending triangle pattern with the top at $67.12. It managed to sail above that level in November, December and January. The coin has also moved above the 25-day and 50-day moving averages.

A closer look reveals that it also retested support at $84.60, which was the all-time high on Dec. 6. Therefore, the coin is likely to have a bullish breakout as buyers target the key level at $100 as we wrote here.

ALSO READ  Crypto exchanges' audit reports were anything but an audit, says Dan Ashmore

Buy Litecoin

eToro

eToro offers a wide variety of cryptos, such as Bitcoin, XRP and others, in addition to crypto/fiat and crypto/crypto pairs. eToro users can connect, learn from and copy or be copied by other users.

Buy LTC with eToro today

Public

Public is an investment platform that allows you to invest in stocks, ETFs, cryptocurrencies and alternative assets such as fine art and collectibles all in one place.

Buy LTC with Public today

LEAVE A REPLY

Please enter your comment!
Please enter your name here