As it appears to be, cryptocurrency investors nowadays are just looking for an opportunity to jump into the space. And, for the same reason ‘buy the dip’ and stacking sats, seem to be trending every time Bitcoin’s price has dropped over the last two months.
This time as well, the same situation is developing as Bitcoin, along with other altcoins, collectively tripped the market cap, which resulted in a 5.66% fall erasing $103 billion out of the crypto space.
Buy the dip, but for Litecoin?
Now interestingly, most of the demand is coming from Twitter which has been in its own turmoil ever since Elon Musk acquired it for $44 billion.
Now, the most pertinent question is- Can the demand actually help Litecoin make some gains. And, it seems slightly difficult to answer this question, at the moment.
Firstly LTC has been performing weakly (in terms of price) when compared to most of the other altcoins. This is because, over the week, the silver to Bitcoin’s gold has lost 15.53% and slipped below $100 to price levels that were last visited by LTC a month ago and before that only at the beginning of 2021.
Although LTC managed to recover and trade at $100 on 27 April, it may not be able to bring in enough demand for a near-term rally.
Since the entire market is setting itself up for potential recovery, one must consider all the other assets that have the edge over Litecoin. Not to forget, Litecoin seems to be floundering as a lucrative asset at the moment.
The top cryptocurrencies such as Bitcoin, Ethereum, XRP, and Cardano are all doing better than Litecoin currently.
Although there are many other altcoins that are also doing better than Litecoin, these four assets’ price action has been pretty similar to LTC’s, which is why we can consider them for the sake of comparison.
An investor would only be drawn toward an asset if it promises a good return and Litecoin is certainly not even in the running for that.
Annual ROI for LTC is negative, and while ROI for BTC, ADA, and XRP is also negative, it is still better than Litecoin. Well, the only asset to promise actual returns is Ethereum, albeit by a minimal margin.
The MVRV ratio comparison shows that while Bitcoin, Ethereum, and XRP are all maintaining a positive value above 1.0, Cardano and Litecoin are below it, with the former standing at 0.92 and the latter at 0.86, at press time.
Thus, it all goes back to Litecoin’s utility which, in comparison to all these assets, is pretty insubstantial, keeping the altcoin’s presence minimal in front of them.