In the last ten days, there has been a significant decrease in crypto addresses with a positive balance on the Litecoin blockchain.
In fact, starting from the end of November, almost 200,000 public addresses holding LTC have been emptied.
Summary
The decline of crypto activity on the Litecoin network
This is a decidedly strong decline, not so much in terms of magnitude but especially in terms of speed.
In fact, there are still more than 9.1 million public addresses on the Litecoin blockchain that hold LTC, but at the end of November there were 9.3 million.
However, it is worth noting that in June alone there were less than 8.6 million, and since then they have practically increased almost constantly.
Therefore, although it is a significant and sudden drop, it does not seem to be considered as a signal of any kind of problem. Perhaps they simply grew a lot in the last few months and therefore it is only a sort of “retracement”.
Note that on the Bitcoin blockchain there are as many as 50 million public addresses with a positive balance, which is more than five times as many. However, the market capitalization of LTC is nearly 170 times lower than that of BTC, so 9.1 million addresses with a positive balance are not few at all.
The price of the cryptocurrency Litecoin (LTC)
After the August 6th halving, the price of LTC has dropped.
In fact, as often happens, it had risen before the halving, but as soon as this happened it went down.
After reaching $63 at the end of 2022, the price of Litecoin had risen to $107 in July, with a gain of almost 70%.
But then it started to decline, so much so that by September it had fallen below the closing price of 2022, below $61.
However, it should be emphasized that, thanks to the halving, the bottom of the last bear market was not touched by the price of LTC in November, with the failure of FTX, but in June 2022, when it dropped to $47.
Therefore, although the minimum reached in October 2023 was lower than the price at which it closed in 2022, it was still significantly higher than the bottom of the bear market.
In the last month and a half, however, it has risen to $73, surely thanks to the generalized growth of the crypto market.
The Litecoin Halving
Already in the past, Litecoin’s halving had shown that it was not able to create a positive trend in the price of LTC.
While all three Bitcoin halvings have always triggered a new bull run, a few months later, all three Litecoin halvings instead have been followed by a decline. In other words, if the Bitcoin halving tends to have positive effects on the price of BTC, the Litecoin halving does not.
Instead, the price of LTC depends heavily on the general trend of the crypto market, which in turn is influenced by the trend of the price of Bitcoin. Therefore, the indirect effects of Bitcoin’s halving have a greater impact on the price of LTC than the direct effects of Litecoin’s halving.
Currently, four months after the last Litecoin halving, the price of LTC is not only 82% lower than the all-time highs of May 2021, but it is also 21% lower than the pre-halving price.
The paradox
However, all of this clashes with a couple of on-chain data that seem to show something different.
In fact, although there has been a sharp and sudden drop in the number of Litecoin addresses with a positive balance, the number of active addresses daily has increased since mid-November.
After the halving, they had dropped to 183,000, but on November 14th they reached a daily peak of over 1.1 million. Furthermore, since December 5th, they have been consistently over half a million per day, a level that has not been seen since June.
On average, it does not deal with record levels, although the one on November 14th is indeed the all-time record for this metric on the Litecoin blockchain.
Moreover, the number of daily transactions is also increasing.
On the peak day there were more than 1 million, which also represents the all-time highest record. Since December 5th, there have been over 400,000 per day, a level that hasn’t been seen since May.
These data are consistent with the increase in price in recent weeks, as this is likely what generated them, but they do not align with the significant contraction of addresses with a positive balance.
It could also simply be a restructuring of some wallets with the consolidation of funds from many addresses to a few.
