Litecoin (LTC) Price Maintains Uptrend Despite Declining MVRV Ratio, Suggesting Potential Overvaluation

After the Federal Reserve decided to keep interest rates unchanged, the crypto market has maintained steady growth. Among these, Litecoin stands out

Cryptocurrency price analysis shows that Litecoin price surged to highs of $134 following rumors of a Litecoin-based exchange-traded fund (ETF). This news led to a buying spree among investors, pushing LTC price up by more than 17% in just 24 hours.

The recent price surge of Litecoin has had an interesting impact on several key on-chain metrics. Notably, the MVRV ratio for Litecoin has been declining despite the price increase. This metric, which measures the average realized value of a coin relative to its market value, is typically used to assess whether a coin is over or undervalued.

According to the latest data, the MVRV ratio for Litecoin is currently at 1.23, indicating that the last realized value is nearing LTC’s market value. This suggests that, while prices are increasing, the value being realized by holders does not fully support this price increase, potentially indicating overvaluation.

However, it's important to note that this metric is just one piece of the puzzle and should be considered in conjunction with other factors when making investment decisions.

Chart: Trading View

As Litecoin price continues to surge, several key levels are emerging on both the upside and downside. Currently, LTC price is facing strong resistance at the downtrend line, which has capped several attempts at a breakout. If LTC breaks and closes above this line, it could set off a rally towards $150, and possibly extend to $165.

On the other hand, if the price sharply reverses from the downtrend line, it means that sellers are still influential at higher prices. This could lead them to try pushing the LTC/USDT pair back down towards the 50-day SMA at $120.

Overall, Litecoin price is showing signs of strength as buyers continue to push from lower levels. However, the emerging levels will be crucial in determining the next directional move for LTC.