Litecoin ($LTC), witnessed a surge in on-chain activity earlier this month. According to crypto analyst Ali, the number of new Litecoin addresses hit 1.27 million on December 20. That was the biggest surge in the past two years, which happened in just one day.
Litecoin’s trading surge didn’t prevent a value dip. What’s behind the decline?
Additionally, data from on-chain metric analysis firm Santiment reported the number of unique Litecoin addresses that are actively participating in network transactions remained high. This metric could signal increased usage of the network.
Moreover, there was a surge in velocity, suggesting that LTC was circulating more actively within the network in recent days.
Litecoin’s Puzzling Performance
A potential driver behind the recent surge in Litecoin activity is the ongoing inscription frenzy. On December 19, over 10 million Ordinals were inscribed on the Litecoin blockchain, as reported by the official Litecoin Twitter account. This remarkable feat showcases the robust and vibrant Litecoin community, further fueling the network’s momentum.
However, the robust activity didn’t leave a major impact on the value of Litecoin. The liquidation levels, which indicate the amount of LTC that could be forced to be sold due to margin calls, remained low. According to data from Hyblock Capital, a selling pressure built up near the $72 price mark, but the price of LTC still rallied.
The bullish momentum didn’t last long. The cryptocurrency was down from around $72.73 to $70.24 on December 25. At the press time, Litecoin is trading at around $72.13, a slight decline in a day. Santiment data also showed an accumulation trend among derivatives investors.
Litecoin’s mission is to become a reliable, fast, and cost-effective digital currency capable of supporting daily transactions and fostering crypto adoption across diverse user groups.
Litecoin has been a popular cryptocurrency since its launch, and it has reached a market capitalization of over $10 billion at its peak. Due to the market downturn, Litecoin’s market cap plummeted by 50%, falling to over $5 billion as the 19th largest cryptocurrency by market capitalization.
Solana Outperforms The Market
December has brought festive cheer to the crypto market, with a major recovery taking hold since the month began. The breakout of Bitcoin above $43,000 acted as a catalyst, sending a wave of positive sentiment across the industry. Compared to the top 10 altcoins by market cap, Litecoin is considered underperformed.
A majority of cryptocurrencies have responded with an uptick, painting the charts green and raising hopes for a sustained bull run. Solana ($SOL) has the most impressive performance. SOL surpassed $114 last weekend, marking its highest price in 20 months.
Solana memecoins are in the spotlight. Solana’s own memecoin, Bonk, has played a starring role in this trend. Launched in December 2022, Bonk quickly amassed a market capitalization of over $1.2 billion, capturing the attention of investors and sparking a wave of similar projects.
One key strategy employed by Bonk was an airdrop to holders of Solana’s Saga phone, a limited-edition smartphone with built-in crypto functionality. This airdrop created a surge in demand for Saga phones, with prices briefly reaching up to $5,000 per unit.
Meanwhile, the Solana DeFi ecosystem also gains traction. Orca, a leading DEX on the platform, processed over $750 million in trading volume on December 15, marking a significant increase from its $100 million volume in the previous month.
The excitement surrounding DeFi and memecoins has propelled Solana to new heights. Solana has officially surpassed XRP to become the 5th largest cryptocurrency by market capitalization, with a peak of over $47 billion.
As 2024 comes close, there is every reason to think we will see higher prices across the crypto complex. Markets were blindly sold, and now investors are waking up to the fact that crypto assets were way too cheap. 2024 looks brighter for crypto prices, but there may be a social cost that drives prices higher.