Litecoin Presents A Bullish Case With The MVRV Ratio At A Two-Year Low

    • Litecoin presents an undeniable bullish outlook as the MVRV ratio drops to 0.55.
    • A double-bottom pattern was set to kickstart LTC’s rally to $75.
    • Holders with coins between 100 and 1,000 LTC increased to 29,300 while focusing on the bigger bullish picture.

    Litecoin’s recovery has been in lock step since the beginning of 2022. The token traded at a new yearly low at $52 before ascending to robust support highlighted at $60. An initial push for recovery eyed $100 but lost traction amid the approach to $75.

    At the time of writing, LTC traded at $62 while its short-term technical outlook hinted at a retest of the buyer congestion at $60. Another recoil from this zone was expected to launch LTC beyond the key barrier at $75 and bring the $100 level within reach.

    How Undervalued Is Litecoin?

    The market value to realized value (MVRV), an on-chain metric by Glassnode, has dropped to levels not seen in the last couple of years. It represents the ratio between LTC’s market cap and the realized cap.

    Litecoin’s price would be said to be overvalued if the ratio is above 1 and vice versa. Excessive fear is often associated with a low MVRV ratio.

    Litecoin MVRV Ratio

    Litecoin Presents A Solid Bullish Case With The MVRV Ratio At Two-year Low
    Glassnode chart

    It’s worth mentioning that the ratio was last at the same level (of around 0.55) in April 2020 before Litecoin’s price made a majestic rise to $360.

    Some investors seemed to have seen the bigger picture and were less concerned with the prevailing volatility. For instance, holders with coins between 100 and 1,000 have increased to 29,300 from 28,354 recorded in early May. Recovery is likely to gain momentum if demand for LTC continues to surge.

    LTC Supply Distribution

    Litecoin Presents A Solid Bullish Case With The MVRV Ratio At Two-year Low
    Santiment chart

    In the meantime, a double-bottom pattern printed on the four-hour chart could mean Litecoin’s bullish escape. As illustrated, the two bottoms, separated by a relatively high peak represent the floor price. It is also an area with an immense concentration of buyers who may flip the trend for gains to $75.

    LTC/USD Four-Hour Chart

    Litecoin Presents A Solid Bullish Case With The MVRV Ratio At Two-year Low
    Tradingview chart: LTC/USD

    In this case, a rebound was anticipated at $60 with the next rendezvous for the bulls set at the pattern’s neckline. If the wall gives way, Litecoin would be ready to make a 14.25% climb to $75.

    John Isige
    John is a cryptocurrency technical analyst, who looks at micro, macro and fundamental factors affecting market trends.

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