Litecoin [LTC] shows signs of recovery, can this be the reason

LTC’s difficulty and hashrate increased, suggesting an increased number of miners.
TVL went up while on-chain performance looked bullish.

On 13 March, the Litecoin Foundation revealed that Litecoin’s [LTC] mining difficulty had reached a new all-time high. As its difficulty increased, Coinwarz’s chart pointed out that the network’s hashrate also registered an uptick over the last week.

Litecoin mining difficulty is touching a new high!🚀
Difficulty is a variable measure of how difficult it is to find a hash below a given target. An important metric for mining & how the truly decentralized #Litecoin network controls new coin issuance. $LTC pic.twitter.com/n4e6rIodjj

— Litecoin Foundation ⚡️ (@LTCFoundation) March 13, 2023

Read Litecoin’s [LTC] Price Prediction 2023-24

The surge in hashrate indicated an influx of new miners on the network. A possible reason for the new influx could be LTC’s recent price action, which favored the bulls. As per CoinMarketCap, LTC’s price increased by 4.46% in the last 24 hours, and at the time of writing, it was trading at $80.00 with a market capitalization of 5.7 billion.

NFTs are luring more miners

Apart from LTC’s rising value, another reason for the increasing hashrate could be the newly supported Litecoin Ordinals. Ordinals were initially launched on Bitcoin’s [BTC] blockchain. However, Litecoin started supporting these NFTs during the concluding weeks of February. Since its launch, Ordinals have come a long way, crossing the 200,000 milestone last week.

⚡ 200,000+ Litecoin Ordinals ⚡

— Litecoin Foundation ⚡️ (@LTCFoundation) March 8, 2023

Network value on the rise?

LTC’s network value witnessed a steep decline over the last week as its Total Value Locked (TVL) went down. However, in a spot of good news, according to DeFiLlama, LTC’s TVL was showing signs of recovery.

As per the chart below LTC’s TVL increased by more than 2% in the last 24 hours, which was optimistic. However, it was surprising to see that despite growth in multiple areas, the number of daily active users declined slightly over the last two days.

Source: DeFiLlama

Will LTC sustain the price pump?

LTC’s growth in TVL can only continue if its price continues to be under the bulls’ influence. Therefore, a look at the blockchain’s metrics gave a better understanding of the possibility of LTC sustaining its recent price surge.

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Santiment’s data revealed that the price uptrend was accompanied by an increase in volume, which acted as a support for the hike. LTC’s MVRV Ratio also increased considerably over the last few days. More LTC was transferred to wallets lately, which was evident from its rising velocity.

In addition to that, after a sharp decline, LTC’s Binance funding rate also went up, suggesting high demand from the futures market.