In the midst of fluctuations in the broader market, Litecoin (LTC) has shown a remarkable 3% increase over the past week, reaching a trading price of $66.37 at the time of writing, outperforming Bitcoin (BTC) that failed to maintain the crucial $57K support.
Analysts have pointed out that September has traditionally been a positive month for LTC. On the contrary, it is noted that Bitcoin tends to exhibit bearish tendencies during this period of the year.
The question arises: is the fall of Bitcoin in September driving the rise of Litecoin? Are investors turning to LTC as a safer option or as a unique alternative? This scenario is currently under investigation by industry experts.
The Strong Impact of Bitcoin on LTC
Remarkably, LTC has surged by more than 17% since early August, climbing from $56 to $66. The significant rally of Bitcoin during the same period, where it tested the $64K mark, likely contributed to this surge for Litecoin.
Despite Bitcoin’s bearish start to September, with a drop below $57K, LTC bulls have managed to prevent a similar decline in its price.
According to analysis conducted by experts, since August 28th, LTC has maintained an 8% upward trend despite the dominant bearish trend of BTC.
While it is widely known that Bitcoin has a significant impact on altcoins, the level of divergence observed between Bitcoin and Litecoin is quite unusual.
Historical price charts have been scrutinized to ascertain if this anomaly is a temporary occurrence or if it signifies a deeper underlying trend.
Upon reviewing the chart data, a notable correlation between the two coins has been revealed. Three years ago, during an early September rally, LTC reached the $200 threshold while BTC surpassed the $50K resistance level.
Subsequently, LTC experienced a decline as BTC retraced to the $40K support level. Additionally, Litecoin’s upward momentum has coincided with Bitcoin’s bullish phases whenever LTC neared its peak levels.
Thus, the prevailing pattern underscores Bitcoin’s supremacy over Litecoin, suggesting that the recent anomaly may be transient. This poses the question: what triggered this divergence?
The Surge in Litecoin’s Value and Its Strategic Development
In a recent update via X (formerly Twitter), Litecoin developers heralded a significant milestone: Litecoin has now surpassed Bitcoin in transaction volume by more than 10%.
In light of Bitcoin’s ongoing volatility, it has garnered considerable attention from prospective traders, evident in the rising open interest data.
Following a day where Bitcoin bears jeopardized a much-anticipated recovery, LTC’s Open Interest saw a notable surge from $213M to $252M, signifying an 18.3% increase. Concurrently, its trading volume soared from $277M to $482M, reflecting a 74% uptick.
Conversely, Bitcoin’s open interest declined from $31B to $29.07B, marking a 6.2% decrease, with its volume dropping from $78B to $68B, indicating a 12.8% fall.
This spike in user engagement aligns with LTC’s recent upward trajectory, highlighting Litecoin’s strategic approach of surpassing Bitcoin through quicker transactions and lower fees – a strategy that has evidently paid dividends.
Nonetheless, caution is advised, especially considering the historical trend in early September where LTC mimicked BTC’s decline.
Overall, if Litecoin continues to pique the interest of traders, it could be on course to retesting its previous resistance level at $76. Conversely, if Bitcoin’s volatility outweighs LTC’s gains, there might be a retracement towards $50.