The price of Litecoin (LTC) crept higher on May 15 as the market assessed its entry into the thriving nonfungible token (NFT) mania.
LTC price rallied by more than 6.5% on May 15 to around $87.50, emerging as one of the best performers among the top-ranking crypto assets like Bitcoin (BTC) and Ether (ETH). LTC price is up 115% when measured from its market low of $40.25 in June 2022.
Litecoin launches its own token standard
The LTC price rally appears two weeks after the advent of the Litecoin Ordinals Protocol.
The concept is similar to Bitcoin's Ordinals Protocol, which allows people to mint NFTs — text, pictures, audio, video, etc. — atop the base blockchain using an experimental BRC-20 token standard, similar to Ethereum's ERC-20.
6/ Then anybody can mint it for free. All BRC-20 tokens are free mints with no pre-mine. In this example token the "lim" (limit) was set to 1,000 and the "max" (max supply) was set to 21,000,000. So anybody can inscribe a mint JSON which works until 21,000,000 tokens are minted. pic.twitter.com/Gqo8TLrQjR— Leonidas.og (@LeonidasNFT) May 8, 2023
On May 2, the Litecoin community introduced a forked version of the BRC-20 standard called "LTC-20." As a result, anybody can now inscribe an NFT — an LTC-20 standard token — into the Litecoin blockchain using its native Ordinals protocol.
Litecoin network activity has increased after introducing the LTC-20 standard with the total number of daily on-chain transactions reaching a record high of over 576,700 on May 9, according to BitInfoCharts.com.
As of May 14, the transactions were down to 511,290 but were still higher by historical standards.
In addition, the total number of active addresses on the Litecoin network increased substantially after the LTC-20 token standard introduction, according to Santiment data.
"When examining the LTC supply distribution, we can see that the smallest group of wallets, holding between 0 and 0.001 LTC, is growing rapidly in tandem with the increase in active addresses," the platform noted, adding:
"This correlation suggests that LTC20 could indeed be the driving force behind the active address anomaly on the Litecoin network."
On the other hand, the number of Litecoin whales — entities holding more than 1,000 LTC into their unique addresses — has dropped, showing they have shown a relatively lower interest in the LTC-20 euphoria.
What's next for LTC price?
More network activity underscores rising demand for LTC, which may have influenced Litecoin's recent price gains. In addition, the euphoria surrounding Litecoin's upcoming halving in August has also boosted LTC's upside prospects.
Related: Bitcoin addresses holding 1 BTC or more reach one million: Glassnode
From a technical perspective, LTC appears to have been breaking out of its multi-month descending channel range to the upside.
As of May 15, LTC/USD was testing the channel's upper trendline as support, which, if done successfully, could lead the price toward $130 by August, up about 50% from current price levels.
Otherwise, Litecoin price risks returning inside the channel range to eye a run-down toward the lower trendline. That mean a fall toward $25, down approximately 70% from current price levels.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.