Litecoin price steadies as correlation with Bitcoin hits 0.88

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There has been a significant rally in the price of Litecoin over the past few months. Since June last year, Litecoin has gained over 90% while BTC is up only 1%. The difference between the prices of the two popular proof-of-work coins continues to widen. It reached a high of $93 this month, the highest point since May 9. It is up more than 100% from its 2022 low.

bitcoin and litecoin correlation

it is not clear why Litecoin And the relationship to bitcoin has fallen apart over the past few months. In the past, the two, along with Bitcoin Cash, had one of the closest correlations. This means they were all tracking each other.

According to Into the Block, the correlation between the two dropped from 0.92 to a low of -0.17 on November 7th. Lately, it seems that this correlation figure is getting closer as it stands at 0.88. A correlation coefficient close to 1 is usually a sign that two assets are moving in the same direction.

One possible reason for the outperformance of Litecoin price is that the on-chain numbers have been relatively strong over the past few months. Mining activity, in particular, has been quite strong, with the hash rate rising to its highest level on record. Hash rate is an important number that measures the health of a network. A high figure is a sign that the activity is doing well.

Another on-chain metric is that its historical volatility has been decreasing over the past few days. It peaked at 106% in November and then fell to the current 42.6%. In fact, a closer look at the charts shows that this volatility downtrend has started as the coin has started to gain momentum. A low volatility figure is usually a bullish signal for an asset.

Litecoin Price Prediction

LTC Chart by TradingView

The daily chart shows that LTC price has been in a strong bullish trend over the past few months. As it climbed higher, the coin formed an ascending triangle pattern with a top at $67.12. It managed to move above that level in November, December and January. The coin has also moved above the 25-day and 50-day moving averages.

A closer look shows that it has also retested the support at $84.60, which was the highest point on December 6. Hence, as we write, buyers target the key level at $100, so the coin is likely to witness a bullish breakout. Here,

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