What is driving the surge in Litecoin’s price today?

The Price of Litecoin

The price of Litecoin (LTC) has seen an upward tick, reaching $88.99 on May 15, as the market evaluates its entry into the thriving nonfungible token (NFT) mania.

LTC Price Rally

LTC price rallied by more than 6.5% on May 15 to approximately $87.50, emerging as one of the best performers among the top-ranking crypto assets like Bitcoin (BTC) and Ether (ETH). LTC price has experienced a significant increase of 115% since its market low of $40.25 in June 2022.

The Litecoin Ordinals Protocol

The LTC price rally comes after the recent introduction of the Litecoin Ordinals Protocol. This protocol is similar to Bitcoin’s Ordinals Protocol, enabling individuals to mint NFTs (text, pictures, audio, video, etc.) atop the base blockchain using an experimental BRC-20 token standard, similar to Ethereum’s ERC-20.

On May 2, the Litecoin community introduced a forked version of the BRC-20 standard called “LTC-20.” This advancement allows anyone to inscribe an NFT, represented by an LTC-20 standard token, into the Litecoin blockchain using its native Ordinals protocol.

Increased Litecoin Network Activity

Since the introduction of the LTC-20 standard, Litecoin network activity has surged. On May 9, the total number of daily on-chain transactions reached a record high of over 576,700, according to BitInfoCharts.com. Although the number of transactions decreased to 511,290 on May 14, it remains higher than historical standards.

In addition, the total number of active addresses on the Litecoin network has significantly increased since the LTC-20 token standard was introduced, as reported by Santiment data. This growth in active addresses correlates with the expansion of the smallest group of wallets, holding between 0 and 0.001 LTC, suggesting that LTC-20 may be driving the increase in active addresses on the Litecoin network.

However, the number of Litecoin whales, entities holding more than 1,000 LTC in their unique addresses, has decreased. This indicates their relatively lower interest in the LTC-20 euphoria.

What’s Next for LTC Price?

The rising network activity, coupled with the upcoming halving of Litecoin in August, has bolstered LTC’s upside prospects. From a technical perspective, LTC appears to be breaking out of its multi-month descending channel range to the upside.

As of May 15, LTC/USD is testing the upper trendline of the channel as support. A successful breakthrough could drive the price towards $130 by August, representing a 50% increase from the current levels. Conversely, if the price fails to maintain support, Litecoin may return inside the channel range and potentially decline to the lower trendline, targeting $25, which is around a 70% decrease from the current price levels.