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Litecoin (LTC) Still Has Room For Further Downside
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Litecoin (LTC) Still Has Room For Further Downside

The recent market correction seems to be more than a correction in terms of prices. It appears to be about righting most wrongs. For instance, coins that got pumped hard during the previous rallies without having solid fundamentals or use cases have been the ones to suffer the most. Litecoin (LTC) seems to be one of those coins. Having once been the beneficiary of FOMO surrounding Coinbase listings, Litecoin (LTC) is now just another coin on Coinbase. The reason LTC/USD did so well after its Coinbase listing was because it was the cheapest coin on Coinbase with a lot of room to go. Investors preferred to own one whole coin rather than a portion of Bitcoin (BTC).

Litecoin (LTC) also had a unique selling point back then as it was supposed to solve the spendability problem that Bitcoin (BTC) failed at. It did not make much sense to use Bitcoin (BTC) for buying or selling things because it was slow and expensive. Litecoin (LTC) on the other hand was faster and cheaper. A lot of people back then had no idea that we are going to see a plethora of new cryptocurrencies enter the market that can do the same thing! A lot of cryptocurrency projects today can do what used to be Litecoin (LTC)’s speciality. After Litecoin (LTC), Bitcoin Cash (BCH) entered the scene doing the exact same thing until it was pulled apart in a Civil War and reduced to a useless centralized token that some now call Bitcoin Cash ABC and some call it Bitcoin Cash SV, others refer to Bitcoin Cash ABC as Bitcoin Cash (BCH).

The point is, during the recent market correction we have seen useless projects go down in miraculous ways. Who would have thought that Bitcoin Cash (BCH) would go down in the way that it did? Similarly, ICOs that did not serve any particular function were stripped off their funding and forced to declare bankruptcy. Litecoin (LTC) is one of the few coins in the market which does not share the same outlook as the rest of the coins, both fundamentally and technically. We mentioned in one of our previous analyses on Litecoin (LTC) how it could follow the same pattern as before to go down once more, and it did. The price might climb close to $50 again but it is highly likely that it will fall again.

It is pertinent to note that this does not apply to the rest of the market; it has to do with Litecoin (LTC) alone because its previous price action has not been in tandem with the rest of the market. In our next analysis on Litecoin (LTC) we will cover how Litecoin (LTC) can make a new low even after the market capitulation. However, let us focus on why it can drop further for now. If we look at the weekly chart for LTCUSDShorts, we can see that the number of shorts has now dropped to the bottom of the ascending channel which means Litecoin (LTC) has room to go up temporarily. However, when it goes up, we are likely to see an even higher surge in the number of Litecoin (LTC) shorts that will put sell pressure on the coin to push it down again. 

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Fakhan

I work as the key Trading Analyst for Crypto Daily and provide the team with regular analyses and updates regarding the technical performance of all cryptocurrencies on the market. I am responsible for the production of articles and posts for Crypto Daily’s own technical analysis section and spend my time monitoring and commenting on the varied moves the markets make on a daily basis.

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