Litecoin, which is technically almost identical to Bitcoin, dropped to $55 from about $64 in the past week, as Bitcoin plunged on the announcement of the suspension of Segwit2x hardware fork. Litecoin, which aims to process a block every 2.5 minutes (Bitcoin takes 10 minutes) and uses a script in its proof-of-work algorithm, is expected to reverse the trend and move up against the Greenback in the week ahead due to arguments presented below.
Litecoin, which remained sidelined during the Bitcoin rally in the past few weeks, got the much-needed boost when Coinone, a major South Korean exchange, added the cryptocurrency to its platform this month. In the first 24hrs of trading, the exchange processed $3.2 million worth of Litecoin. The cryptocurrency ban in China has allowed South Korea to become the third biggest Bitcoin market in the world.
South Korea’s biggest exchange Bithumb accounts for nearly 25% of the global Litecoin market. As of date, Bithumb processes $580 million worth of Litecoin per day. The exchange is largely credited for the rally in Bitcoin Cash. The addition of Litecoin, which can be mined using normal personal computers, to the Coinone platform is expected to boost the demand for the cryptocurrency since it is four times faster than Bitcoin in terms of transaction confirmation time. Further, the planned scaling solutions for Bitcoin are expected to be integrated into Litecoin as well, and that will also have a positive impact on the price.
Notably, Charlie Lee, the creator of Litecoin has announced on Twitter that he is working to achieve confidential transactions (CT), which will enable users to send and receive Litecoins without any trace. Though governments may not like it, investors would certainly welcome the idea. Thus, we can expect a rally to begin soon. In fact, the sharp rise of altcoin such as Bitcoin Cash is already attracting investors towards Litecoin, which has largely remained range-bound between $50 and $65 for the past two months.
In the US, Trump’s tax reform plan continues to face opposition from influential Senators. In this regard, James Lankford, a Republican from Oklahoma, expressed his concern over the possible $1.5 trillion increase in the budget deficit over the next decade. The Trump’s administration cannot afford opposition from Republican Senators as the administration is seeking to pass tax form without the support of Democrats. To pass the bill successfully, at least 50 of the 52 Senators are needed behind the tax overhaul bill. Thus, on the basis of facts presented above, we anticipate a rally in the LTCUSD pair.
The LTCUSD pair has found support at 57 levels, as shown in the price chart below. The stochastic oscillator is rising towards the bullish zone. Thus, we expect the cryptocurrency to move up in the days to come. On the higher side, the pair is expected to face resistance at 72 levels.
To gain from the probable rally in the LTCUSD pair, we wish to use our surplus funds to purchase a call option, which remains active for a week. We may enter only when the LTCUSD pair trades near $60 in the major currency exchanges.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
