Litecoin gains momentum in anticipation of August halving and increased activity.

Litecoin (LTC) has started the month with a boost, increasing by 7% over the past 24 hours. This is due to the network’s halving in two months and a significant increase in activity in May, which has been noticed by the bulls. This is part of a period of overperformance for Litecoin. In fact, it has shown an increase of 7.5% over the last 30 days, which is the third-best result among cryptocurrencies during that period. It has even outperformed Bitcoin, which has decreased by 6.2%, and Ether, which has fallen by 0.5%.

Litecoin’s network activity has been increasing all year and even more intensely since the beginning of April. According to data from IntoTheBlock, the total number of addresses holding a balance has now increased to almost 8.5 million.

Litecoin is also approaching its upcoming halving in August, which analysts are considering to be a significant event for both the network and the price of LTC. Similar to Bitcoin’s halving, Litecoin’s block reward (paid in LTC) will also be halved.

Compared to Bitcoin, Litecoin is much cheaper in terms of units, which attracts investors looking to position themselves ahead of the halving. According to Charles Storry, head of growth at Phuture, a crypto index platform, “From investors I’m speaking with, they anticipate the halving to push the price of BTC, LTC and the market.”

Litecoin may also be benefiting from the congestion that the Bitcoin network has been experiencing due to the recent burst of activity related to the Ordinals protocol, leading to high costs for users. Brent Xu, chief executive officer and co-founder of Umee, stated that “Litecoin, in a sense, is an old-school clone of BTC and in turn serves a similar purpose.” This is why Litecoin is being used more and more as an outlet during a time of BTC congestion. However, Xu also cautioned that this has happened before and Litecoin’s outperformance may not be sustainable in the long term.

Nauman Sheikh, Head of Protocol and Treasury Management at Wave Digital Assets, agreed that the halving is influencing the current price performance. He noted a 30% increase in open interest for Litecoin futures and perpetual contracts during the last week of May.

Edited by Stephen Alpher.

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