Litecoin Is Lagging The Market
by Bogdan Giulvezan
Litecoin is up more than 30% over the last 7 days, and almost 12% over the last 24 hours, climbing steadily since September 20th. It recently broke the resistance at $80 and it is now testing the highest price reached in 2020.
The recent Bitcoin rise dealt a blow to altcoins and became once again the “talk of the town”, with investors and celebrities flocking to get a piece of the pie. The digital gold is just $2,000 shy of its all-time peak, reached back in late 2017 but the fundamentals that are backing it seem a lot more solid now, with institutional investments and central banks talking about developing their own cryptocurrency. And let’s not forget that JP Morgan had all bad things to say about Bitcoin but now they have already developed their own coin.
However, the altcoin dubbed “digital silver” – Litecoin – is keeping up with Bitcoin’s gains and even surpassing them. What could be the reason behind Litecoin’s meteoric rise? Well, we cannot overlook the recent PayPal adoption that allows users to buy, hold, and sell 4 initial cryptocurrencies: Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.
This shines the spotlight right on Litecoin for two reasons: first up, it gets recognition by being included on a short list of only 4 digital currencies that are featured on PayPal, but it is also the cheapest coin out of the bunch, which makes it more user friendly. Crypto buyers are known to have what we call unit bias, meaning they are more comfortable buying a whole unit rather than increments. And considering that not a lot of people are able and willing to invest $18K to buy 1 Bitcoin, they would rather go and buy a few full Litecoins.
Chart Analysis – LTC/USD
Since bouncing near the $40 level, back in September, Litecoin has been on a constant rise, doubling its value and now trading above $80. As we can see from the Daily chart below, the pair is approaching a major hurdle, represented by 2020’s high located at approximately $84 (the exact price differs based on the exchange).
The most likely scenario is a touch or even a break of the $84 level, followed by a retracement generated by the overextension of price (check lower timeframe charts for this possible dip). However, even if a pullback occurs, the medium-term bias remains bullish for Litecoin and the current uptrend is likely to continue.
The Relative Strength Index is above its 70 level, indicating overbought and supporting the idea of a pullback but the MACD lines are wide apart and moving up, showing bullish momentum. The levels to watch are $85 and $90 as resistance, while support is located between $77 and $76, with $75 as a psychological level.