Litecoin Market Analysis: LTC Prices Calm 10 Days Before Another Historic Halving
Today’s Litecoin (LTC) News
The link between Litecoin and Bitcoin is more than their shared objectives. Charlie Lee is adamant that Litecoin will always complement Bitcoin. While that is true, because the coin is still based on the proof-of-work consensus algorithm with minor tweaks on block generation times, there are other critical differences.
Bitcoin is the larger of the two in terms of market cap, with better infrastructure and is trusted by many investors. As a matter of fact, it is only cryptocurrency whose derivative product, Bitcoin Futures, is on offer by the US CME.
All the same, the price relationship between the two is quite overt. They have a positive, direct relationship like most altcoins but the LTC-BTC link is more pronounced. LTC often lead BTC. Therefore, with Litecoin surging, blasting past expectations and up more than 500 percent after sinking to $20 at the peak of last year’s crypto winter, the fact that BTC is merely 4X after dropping to $3,200 means the asset is undervalued to some degree.
Add that to the bullish sentiment around next month’s halving and both Litecoin and BTC stand to be attractive digital assets for enterprising traders.
Then again, the increasing awareness in the US as per the latest Grayscale investment research could see some of those funds flow to Litecoin given the scheduled event of August 5.
In their finding, the idea that Bitcoin is scarce and could potential growth resonated well to the “average Joe”:
“A large majority of investors (83 percent) were strongly motivated by the idea that they could invest small amounts in Bitcoin today, see how their investments performed, and add to their positions later. The idea that Bitcoin has significant potential for growth and that Bitcoin is scarce also resonated with investors interested in investing in Bitcoin.”
LTC/USD Price Analysis
1 LTC/USD =$159.4286 change ~ -3.53%
At the time of press, Litecoin (LTC) is down 2.8 percent, perched at fourth with better liquidity than Bitcoin Cash and rival coins. Although there was a resurgence across the board, that would not hide the upside resistance in the last two weeks.
Specifically, LTC is trading within a bear breakout pattern with two main resistance lines at the auspicious $100. Besides the round number, the main resistance trend line cannot be ignored. Unless otherwise there is a strong break and close above $100, bears are in control.
Already, the retest phase is complete, and the lack of bulls to force prices above $100 and liquidation is not supportive for optimistic buyers. If the situation persists, then aggressive traders can sell the pullbacks with first targets at $50. As a safety net, a fitting, safe stop limit will be at around $100.
However, considering the proximity to the halving event and the clear uptrend of the first half of the year, the best approach is to take a neutral stance with a bullish skew. Temporary support will be at $80, the base of the double bar bull reversal pattern of July 16 and 17.
If, however, prices sink below this mark after the systemic schedule, then the rally of H1 2019 did price LTC and market forces will correct the overpricing, triggering a liquidation to $50. On the flip side, immediate response and demand for LTC would force a rally towards $120, $150 and later $180.
Disclaimer: Views and opinions expressed are those of the author and is not investment advice. Trading of any form involves risk. Do your due diligence.