Litecoin has experiecned a mild price drop of 0.55% over the past 24 hours. The cryptocurrency currently trades around $84 and has been relatively stable over the past 7 trading days only dropping 0.05%.
Litecoin currently sits 7th position in terms of overall market cap across the entire industry. It has a total market cap value of $4.81 billion and has seen a small price hike of 1.52% over the past 30 trading days.
The cryptocurrency was created in October 2011 by ex google employee Charlie Lee. Lee intended to create a competitor to Bitcoin that was a “lighter” version, hence the name. Litecoin can claim faster transaction speeds and lower transaction fees that that of Bitcoin.
Litecoin can also claim that it has far superior technology relative to Bitcoin, as it already has SegWit and the Lightning Network integrated. More so, Litecoin has already participated in “Atomic Swaps” allowing users to exchange Litecoin for other cryptocurrencies on the blockchain without the need for a third party exchange.
The increased transaction speed, low fees and the ability to handle high transaction volumes positions Litecoin as a strong alternative and competitor to Bitcoin.
However, there has been some speculation regarding Charlie Lee’s impact on the market price for Litecoin as 1 day after the cryptocurrency hit its all time high, Charlie Lee decided to sell his entire stash of Litecoin citing that holding LTC causes a conflict of interest for him. Lee has recently also tweeted claiming that he is doing everything in his power to get Litecoin back above $400, however, as described in the below analysis, the market needs to overcome a significant hurdle around $100.
Let us continue to analyse price action over the long term.
LTC/USD – LONG TERM – DAILY CHART
Analysing the market from the long term perspective above, we can see that LTC had experienced an incredible bullish run when it rose from a low of $49 on November 2nd 2017 and extended to an all time high located at $370 on December 19th 2017. This was an epic price increase of close to 700% from low to high.
After placing the all time high, price action went on to depreciate significantly. Co-incidentally the day after December 19th, Lee tweeted that he had sold his entire stash of coins and the following capitulation is evident.
The market, largely, stayed above the .786 FIbonacci Retracement priced at $118 for the majority of the year. This is a Fibonacci Retracement measured from the entire bullish run described above. We can see that this price level provided support in February, March, April and May. However, as June started trading price action fell below the .786 Fibonacci Retracement and continued falling until it found support just below the .886 Fibonacci Retracement priced at $86. We can see that price action had found support at a downside 1.272 Fibonacci Extension priced at $73. In fact, this area of support is bolstered by two downside Fibonacci Extensions measured at different price levels.
If the bearish momentum within the market does push price action lower we can expect this $73 handle to provide ample support. However, if the market continues further lower then near term support can be located at $53 which is the short term downside 1.414 Fibonacci Extension.
Let us continue to analyse price action over the more recent term to highlight any further support or resistance areas.
LTC/USD – SHORT TERM – DAILY CHART
Analysing the market from a shorter time perspective we can see that LTC had experienced a small price appreciation during April when price action rose from a low around $116 and one to a high close to $180. However, as May began trading we saw the market drop below the 100 day moving average and consequently continued to drop far below Aprils price low.
We can see that the downside 1.272 Fibonacci Extension (red line) priced at $73 provided ample support for the market to rebound. The market made a slight bullish run but found resistance at the bearish .382 Fibonacci Retracement priced at $94. This Fibonacci Retracement is taken from the entire bearish trend seen during June.
If the bullish momentum within the market can pick up once again and push the market above $86, then we can expect near term resistance to be located at the bearish .382 Fibonacci Retracement again. If the market can continue further above this we expect the nearest level of significant resistance to be located at the bearish .618 Fibonacci Retracement level priced at $108. This area of resistance is significantly bolstered by the 100 day moving average, currently hovering at the exact same price level, meaning the market will need significant bullish momentum to overcome this level.
The technical indicators within the market are neither providing favour toward the bulls or the bears at this current moment in time. The RSI is currently trading directly on the 50 handle and shows no indication to which way it wishes to next trade. If the RSI can break and hold above the 50 handle we can expect the bullish momentum to build within the market.
Similarly, the moving averages are trading in a sideways manner producing neutral signals. The 7 day EMA (blue moving average) and the 21 day EMA (purple moving average) are currently trading on top of one another. If the 7 day EMA can break above the 21 day EMA this would constitute to a bullish crossover indicating an increase in bullish pressure within the market.
Due to its age, technology and community, Litecoin is a solid coin with a solid background, even with the recent controversy surrounding the founder selling his coins at the all time high.
However, before we can reach the expected $400 handle stated by Charlie Lee recently, the market first must overcome some serious resistance levels, particularly the $100 level.