Litecoin (LTC) has been a victim of an aggressive crypto correction recently. Apparently, much of this has to do with Litecoin (LTC)âs weak fundamentals and fading interest in the cryptocurrency. The price currently shows a strong bear trend on the daily chart with a bearish EMA alignment. Litecoin (LTC) is also high up in a bullish trading channel and has yet to retest the bottom of the bearish channel.
As many of you are aware, Charlie Lee, the founder of Litecoin (LTC) has recently distanced himself from the coin. This is because no matter how much Litecoin (LTC) grows, it will never be Bitcoin (BTC) or EthereumÂ (ETH). It cannot take those spots because Litecoin (LTC) was not meant to solve a long term problem. It was meant as a temporary gateway to speed up transactions and avoid high costs of transactions associated with Bitcoin (BTC). This is the sole reason Litecoin (LTC) came into existence. The difference though is that Bitcoin (BTC) is completely decentralized as the identity of its founder is not known. Litecoinâs founder Charlie Lee on the other hand is very well known in the crypto space. So, recently when he announced that he had solved his Litecoins (LTC), the crypto community reacted with rage and started looking at Litecoin (LTC) with more skepticism.
The problem with Litecoin (LTC) is that it is yet to be seen if the cryptocurrency will continue to have a role in the future. In all fairness, whatâs to stop Bitcoin (BTC) from becoming capable of handling small transactions for lower costs and higher speed than its present capacity? The same will also be true if another cryptocurrency can do the same job as Litecoin (LTC) and additionally serve a unique purpose in addition to that, like being a smart contracts platform or a privacy coin etc.
Litecoin (LTC)âs dilemma is that the daily chart for LTC/USD is already bearish. However, the weekly chart is nearing a trend change and could soon turn bearish if things do not improve for cryptocurrency markets in the near future. The 21 EMA has come closer to 55 EMA and has the potential to reverse the current bullish weekly EMA alignment to a bearish one in the near future. While this may sound to be a natural consequence of a falling Bitcoin (BTC) price, it is pertinent to note here that something like that will have far reaching effects on the price of cryptocurrencies like Litecoin (LTC).
Some cryptocurrency analysts often mention how market corrections help get rid of the useless coins. This does not mean getting rid of a coin completely but the way this happens is that when long term investors in a useless cryptocurrency like Litecoin (LTC) cash out; the cryptocurrency is left falling down. It may go on to reach a bottom and will start having a reversal from there. However, the difference is that the positive momentum is lost in the face of changing ground realities. Those once long term investors now have no special reason to buy Litecoin (LTC) after they have sold. Previously they may have held on to their coins in the hopes that the price will go up. However, now that they have sold, they can realize without bias that the market has evolved a lot and there are more than just 5 or 6 coins to invest in, so they invest in coins with better future prospects and actual use cases of their own.