Litecoin price steadies as correlation with Bitcoin hits 0.88

Litecoin price has recorded an amazing bull market in the past few months. Since his June last year, Litecoin has risen over 90% of his, while BTC has risen only 1%. The price gap between two popular proof-of-work coins continues to widen. It climbed to $93 this month, its highest since May 9. More than 100% up from 2022 lows.

Correlation between Bitcoin and Litecoin

the reason is not clear litecoin Bitcoin correlations have divorced in the past few months. In the past, the two had one of the closest correlations, along with Bitcoin Cash. This means they all tracked 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. However, the correlation chart seems to be getting closer as the correlation value has recently reached 0.88. A correlation coefficient close to 1 usually indicates that the two assets are moving in the same direction.

A possible reason for Litecoin’s price outperformance is the relatively strong on-chain numbers over the past few months. In particular, mining activity has been very active, and the hash rate has skyrocketed to all-time highs. Hash rate is an important number that measures the health of your network. A higher number indicates better activity.

Another on-chain indicator is that historical volatility has been declining over the past few days, plummeting to its current 42.6% after peaking at 106% in November. In fact, a closer look at the chart shows that this drop in volatility started when the coin started gaining momentum. A low volatility number is usually a bullish signal for an asset.

Litecoin price prediction

LTC chart by TradingView

The daily chart shows that the price of LTC has been trending bullish over the past few months. As it rose, the coin formed an upward-pointing triangle pattern with a top side of $67.12. We managed to cruise past that level in November, December and January. The coin is also above the 25- and 50-day moving averages.

A closer look reveals that the price is retesting the support at the Dec 6 high of $84.60. here.

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