Litecoin (LTC) has done a really good job at holding its ground above $70 but that should not be confused for a bullish momentum long term. In fact, the manner in which LTC/USD is holding this level will only pave the way for a short term relief rally but that’s all it is going to achieve. Litecoin (LTC) is extremely unlikely to rise to a new yearly high from here. Recent moves have exposed its game plan and it has now broken below critical trend line supports which means that further downside is very likely after a short term relief rally while Bitcoin (BTC) completes its move up towards the top of the descending triangle.
The price of Litecoin (LTC) profited the most off its halving hype. Although other cryptocurrencies profited off the halving hype as well but Litecoin (LTC) was its main beneficiary as it ended up rallying aggressively and laying the trend for the rest of the market. Now that it has topped out and broken below key structural supports, we are going to see it fall hard as it completes a long overdue correction. While it may be a sign of relief short term to think that Litecoin (LTC) is holding its ground above $70 but we need to think about the bigger threats that loom over. Apart from the correction that the price has to go through, we need to think about how the next downtrend is going to affect the altcoin market.
The altcoin market as a whole is at risk of a major cleansing that will wipe out most useless tokens. Litecoin (LTC) is the fifth largest coin by market cap which makes it hard to think that it will be wiped off the market despite it arguably being a useless token. However, in this market, we have seen something happen over and over again and that is investors moving towards the next hot thing. So, Litecoin (LTC) might be the fifth largest coin by market cap today but it may not be in that position for long.
The daily chart for LTC/BTC shows that we could still see further downside in Litecoin (LTC) before it breaks out of the falling wedge. Even if it breaks out of the falling wedge, it is not likely to begin its next bullish cycle till it completes its correction and falls below $50 in the months ahead. Litecoin (LTC) is a coin that has received most of its major boosts from hype. The first major boost came from the Coinbase hype when it was first listed there. After that, we have seen halving events prop up its price. For some reason, this coin has managed to not only stay around but it remains the fifth largest coin by market cap despite being nothing more than a Bitcoin (BTC) spinoff. Whether or not it has a future long term remains to be seen but for now investors need to be cautious as Litecoin (LTC) is at risk of more than just a price correction.