Litecoin (LTC) Miners Make Profits, But Are There Problems?

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  • Litecoin hash rate and mining difficulty have increased significantly in the last month.
  • The network as a whole was at a loss, as indicated by the negative MVRV index.

Litecoin (LTC) is among the best performing cryptocurrencies in 2023, jumping up to 33% since the start of the year, data from CoinMarketCap has revealed.

Read Litecoin (LTC) price prediction 2023-24

Due to rising prices, mining activity has decisively increased on the network. According to Coinwarz, the LTC hash rate was 765.12 TH/s at the time of writing, up more than 30% from the previous month. The overall mining difficulty of the network has also increased over the same period.

Source: Coinwarz

A higher hashrate is a positive sign as it means there are more miners on the network, making it more secure.

Litecoin wants to be eco-friendly

On February 24, Litecoin Foundation partnered with Metalpha to develop sustainable mining solutions. Litecoin stated that the key research areas of the partnership will facilitate the use of renewable energy and reduce carbon emissions from mining on the grid.

As mentioned earlier, higher hash rates are desirable. However, they can have negative impacts on the environment due to the increased amount of energy required for mining. This factor acts as a major scale constraint for blockchains, due to which many of them switch to proof-of-stake (PoS) algorithms.

Bears to take over?

Litecoin’s on-chain activity sparked little enthusiasm, as transaction volume dropped by 31% month-on-month, although there were signs of an increase in recent days.

Daily active addresses have dropped considerably since hitting a monthly high on February 9th. Speed ​​also dropped, suggesting that the new addresses stayed away from LTC.

The 30-day MVRV index fell further into negative territory. This meant that most LTC holders would incur losses if they sold their tokens at press time.

Source: Sancimento

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According to CoinMarketCap, LTC is down 2.27% from the previous day to trade at $91.99 at the time of writing. As indicated, LTC moved within a range in February. Price broke part of the resistance on Feb 16th but retraced to test the range lows as support.

The Relative Strength Index (RSI) fell below the neutral level of 50, suggesting that selling pressure has increased in the market. The Moving Average Convergence Divergence (MACD) also showed strong bearish signals.

Source: Trading View LTC/USD

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