Analytical firm Santiment has warned investors that Litecoin is entering dangerous territory, quickly reaching new local highs.
Santiment pointed to several metrics to track Litecoin’s price action and gauge the overall health of the network.
The firm emphasizes that Litecoin is in the danger zone because short-term investors are now in a position to profit. Santiment uses the MVRV seven-day indicator, which shows the average profit and loss of all currently circulating cryptos based on current value. ”
“The MVRV 7D, which measures the short-term profits and losses of Litecoin holders, shows that we are in the danger zone as all short-term holders are currently in profit. This may encourage short-term investors to take some profits.”
Santiment also highlights that Litecoin value appears to have captured Bitcoin’s gains since September’s low.
“The interesting thing to note is that the LTC value is very close to BTCs. This also means that LTC is not a strong altcoin as BTC does not show any strength when it drops and it is essentially BTC dragging it.”
While Santiment expects Litecoin to consolidate, the firm also states that an on-chain metric has a strong signal for the LTC network.
