Litecoin, an altcoin that has been labeled to be faster and lighter than Bitcoin has spiked up to a new all-time high today. Other altcoins have been experiencing a similar bullish run as well, as Ethereum saw a 5% rise in about 24 hours and Ripple added a remarkable 4% to its value.
The peer-to-peer cryptocurrency broke a $400 mark and persisted to an all-time high of $414 on Bitstamp on Monday. Litecoin comfortably sits as the 10th largest cryptocurrency according to its market capitalization which has swelled to an increase of 215% more than its value in the early days of 2021. The increase in the price of the digital asset would not be said to be unexpected as analysts have repeatedly made predictions that the coin would see a greater increase as the value of Ethereum and other core altcoins assents. The incredible surge in the value of Litecoin came after the coin trailed to gain over 49.29% in seven days.
How Does Litecoin Differ from Bitcoin
While Bitcoin is seen as a major store of value, the creator of Litecoin – Mr Lee, believes that Litecoin can perform well as a principal player in payments as the transactions on its blockchain takes an average of two minutes compared to Bitcoin that could take well over 200 minutes. Litecoin, as investors believe, is also a great alternative project for investors that have grown their portfolio from the numerous Bitcoin bull runs to diversify into and decrease the Bitcoin market influence.
According to popular opinion, Litecoin is a giant benefactor of Bitcoin’s slow transaction speed and for this reason, is naturally considered as competition to the leading cryptocurrency. This opinion is held so strongly that analysts still believe that Litecoin is still undervalued.
Is Litecoin Over-hyped
Bringing to memory, the period when Litecoin hit an all-time high of $255 in December 2017 and stood impressively as the fourth largest cryptocurrency in history, to this current period of sitting at a high of over $400, investors and those that are yet to place a stake on the coin might have reasons to believe that the coin is overbought.
Litecoin has a circulating supply of over 67 million and a supply limit of 84 million. The Litecoin Dominance Index, a metric that measures the strength of Litcoin as against other cryptocurrencies in the market speculated that the coin increased from 0.96% on Sunday too as high as 1.115 on Monday alone.
Speculations that the value of Litecoin is a result of a rotation of interests in the cryptocurrency market was highlighted by Jason Lau on Twitter who is the chief operating officer of OKcoin, stating the correlation between Litecoin and Dogecoin in the tweet, as Dogecoin dropped down to 12% the same period as Litecoin surged to an increase of a 12% alternatively.
At this moment, the Relative Strength Index (RSI) displays on the LTC/USD chart to be at an inflection level close to 79.02. which signifies 9 points above the overbought threshold.
Ultimately, a probable decline in response to the monumental value spike of Litecoin might trigger the possibility of sending the value of the coin back to the past base of $252 – $300.