Litecoin Briefly Breaks Above $100

Litecoin Briefly Breaks Above $100

 
In our November 23rd report, we had argued that Litecoin, which is a near replica of Bitcoin, will blast upwards in a week. The LTCUSD pair was trading at about $70, when the report was published. We had also mentioned our intention to purchase a call option to gain from the rally. In line with our prediction, the crypto currency pair broke the major resistance at 72 and touched a high of about $103. However, the LTCUSD pair plunged to $88 levels, as Bitcoin started declining below the psychological level of $10,000. We anticipate a bounce back in the LTCUSD pair due to reasons given below.

Litecoin has galloped nearly 2000% year-to-date. It indicates an increasing level of adoption worldwide. Additionally, it also reflects the potential of the crypto currency as seen by the major players in the financial industry. For every block mined, a miner gets 25 Litecoins. The reward decreases by half once in four years. Overall, only 84 million Litecoins are expected to be generated. Still, the number of Litecoins in circulation will be four times than that of Bitcoin. Litecoin also offers improved storage efficiency. Since the supply is limited, the price is expected to get a boost as demand rises and that is what is happening now. All the major exchanges such as Gdax, Wex, Bithumb, and Coinone have listed Litecoin for trading. Investors will always be ready to look at an asset for investment when there is enough liquidity. A rise in Litecoin liquidity is now luring investors.

For several years, a rise in the value of Bitcoin would result in a decrease in the value of altcoins, and vice versa. Smart money continued to shuttle between Bitcoin and altcoins. Of late, the trend has changed. Those altcoins, which have inherent value, does not lose value when Bitcoin goes up. Litecoin is a classic example of that trend change seen recently. When Bitcoin rallied from $7,000 to $10,000, Litecoin consolidated and rose by about 25% to reach a level of $93. Within the next six months, developers hope to complete the integration of atomic swaps, which would allow an exchange of Litecoin and Bitcoin to take place without a middleman. All these factors indicate the probability of a huge break out soon.

The price chart indicates a strong support for the pair at 70. Further, the RSI indicator continues to stay above the reading of 50. Thus, we can expect a rally in the crypto currency pair.

LTCUSD - Technical Analysis - 30th November 2017

We prefer to speculate an uptrend in the LTCUSD pair by investing in a call option contract. Such a contract may be bought when the pair trades near $70 in the spot market. Further, the contract should remain active until December 8th.

Disclaimer: The trading analysis offered here is our opinion. It is not provided as trading advice, merely an indication of our trading plan. We cannot guarantee success and we encourage traders to incorporate a strong money management strategy to limit losses. Please use this article as part of your own research before formulating strategies prior to trading.


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