Litecoin (LTC) risks a major sell off in the days to come. This is because Litecoin (LTC) is trading in two big rising wedges as seen on the LTC/USD 4H chart above. This means that before the 21st of September, Litecoin (LTC) can be expected to break this rising wedge and fall back towards previous lows. Given that Litecoin (LTC) looks even more vulnerable and weaker than most altcoins at this point, it is also probable that Litecoin (LTC) may fall below previous lows to find an actual bottom. Litecoin (BTC) has a support around $50 which in the case of any other asset would have been a strong psychological support. However, in the case of Litecoin (BTC) we have seen this support break without even putting up a fight.
RSI for the above chart shows that the price is ready to fall again but it may not necessarily settle around the previous low of $47 as there is no historical support at this point. In fact, the price can plunge further into the red and fall towards $30. Wave trend analysis for Litecoin (LTC) points to the same and shows that Litecoin (LTC) may not be due just for a bearish wave down, but in fact, the price of Litecoin (LTC) could be preparing for a longer correction compared to most cryptocurrencies. This might have to do with the fact that Litecoin (LTC) rallied astronomically in 2017 but has now lost its appeal. This is directly linked to a strong demand for Bitcoin (BTC). A weak or uncertain demand for Bitcoin (BTC), as we have seen in the past, created room for most of these spinoff coins to jump in.
However, there is a growing realization among cryptocurrency investors that if you keep investing in one fork or the other, where does it end? What then is the difference between fiat money and Bitcoin (BTC)? Besides, if Bitcoin (BTC) is capable of resolving the issues that Litecoin (LTC) and other coins like Bitcoin Cash (BCH) set out to resolve, what then is the need for these spinoff coins? Well, there is a counter argument to this that compares Litecoin (LTC) to silver, which is very plausible but it again begs the question, “How many of these gold and silver like coins are we going to have?” There is no doubt that we are in very early days in this market, but the learning curve here is a different one and things are happening at a lot more faster.
Litecoin (LTC) had been trading in a falling wedge against Bitcoin (BTC) since the beginning of the correction in January. It finally seems to have broken that falling wedge. The chart above for LTC/BTC on the 4H time frame shows that Litecoin (LTC) has settled atop the trend line after breaking the falling wedge. RSI and wave trend analysis both point to looming fears of a possible sell off. The correction against Bitcoin (BTC) seems to be over for the most part but Litecoin (LTC) may still drop significantly against the US Dollar (USD) by end of the month.