Litecoin is currently showing a lot of positive growth and there may be a great case for that trend to continue. This year has been a turbulent one for cryptos and Litecoin has not been able to avoid the drastic ups and downs experienced by virtually every other digital asset in the market. Major global events taking place this year have been testing global markets of all kinds and it has been interesting to see how our favourite cryptocurrencies have reacted.
For Litecoin, the roller coaster has finally started to push north after going through a period of bearish price action. From highs of $83 per coin back in mid-February to a low of $30 a month later and then a slow climb to nearly $50 by April 9th only to drop by 16% again to a higher low of $39 over the course of six days, it appears that LTC is now set to move forward in a positive light – assuming certain criteria are met. Some experts have warned that LTC may still head towards bear territory but there are also plenty signs that point in the other direction that should not be overlooked.
For some, there is no denying that the bulls have now taken control as the price for LTC is now rubbing up against the $45 mark. According to one popular crypto analyst on Twitter, Coinboard, Litecoin is headed straight for the resistance of $54.
Indicators for Litecoin
Some of the indicators for Litecoin that analysts have used to make their make a case for a continued downward trend for the cryptocurrency are the bear flag that was developing following a major dip in price, LTC’s failure to break past one of its most important points of resistance which currently sits at around $50, and the likelihood of the coin dipping down past the current support on $42.
While reaching the resistance of $50 still seems to be a ways off, it does not appear that the bear flag is playing out. Of course, there is always a chance for that to happen, but action on the charts indicates strong buying pressure for the coin which, if it continues, would negate that possibility – at least for the short-term outlook. The current support of $42 is a critical turning point for the price and we will keep our eyes on that. LTC hitting $40 would be a much bigger deal as that price has acted as both support and resistance many times for LTC – especially in periods of consolidation.
In the past two days, Litecoin prices have surged to nearly $44 from a low of $39 for a gain of almost 13%. While gains of this size are somewhat commonplace for LTC, the last time we saw any major positive movement like this was between April 5th thru 7th when prices hit gains of 15.3%, only to drop once again.
Factors Pushing Prices Up
Litecoin’s recent surge in price can likely be attributed to a jump in price for the entire crypto market. There are a few factors currently pushing prices up.
One of those factors is the long-awaited (and contested) Libra project from Facebook. In order to satisfy regulators and financial watchdogs across the globe, Facebook as reinvented its crypto project and has announced that the project will now move forward, albeit on different terms than what the company had originally put forward.
The new structure of Libra is very different than the original picture, in fact. Now, instead of having one fiat-backed stable coin that would reach across the globe, Libra will be released into various markets around the world as various region-specific versions of itself. This means that the laws and regulations governing how Libra will operate from country to country will change based on local law and that the coins will be backed by the fiat currencies belonging to those countries (instead of the dollar which was the original plan).
This news has emboldened the crypto market on the whole because it has now become clear that Libra will not have a major effect on any of the already established crypto projects as was originally feared by some. Instead, Libra will behave more like a payment system similar to others already functioning, such as PayPal and Skrill, with the primary difference being speed and cost. That means Libra will be more centralized and more regulated as a result placing it well outside the cryptoverse on the whole.
Economies Have Begun to Show Signs of Life
Another factor breathing life into the world’s embattled economic markets is that some economies have begun their processes to reopen business, although progress on that front has been slow to say the least.
In the US, the American president has given state governors his blessing to reopen business within their states, but the process will be carried out over some time. The news comes to many as a welcome relief and many have begun placing themselves in positions to take advantage of a rebounding economic market. In Germany and Spain, as well as some regions in Italy, similar steps have been announced which has spurred many to consider the light at the end of the tunnel. All good things for global markets, although the time frame for when a complete recovery can occur is still anyone’s guess. As many businesses have permanently closed their doors as a result of the coronavirus pandemic and unemployment rates reaching record highs, it seems that the road may still be long.
At the moment, it looks appears that we can expect plenty of green on LTC charts over the next few days. With global economies beginning to open their doors once again and the ‘threat’ that Libra once posed to the cryptocurrency apparently a non-starter, cryptos in general in a good place at the moment. That said, Litecoin is known for its big swings of 10-20% so it would not be surprising to see another big price dip once again before rising to new higher highs. Assuming price action follows the same pattern that begun on March 12th when the entirety of the crypto market plummeted, we could see a 10-15% appreciation in price over the next few days. It is important to note, however, that we are currently sitting just above an important support level ($43) and any significant dip below that could spell trouble for the bulls. For now, long positions do look good, but best prices may come after a corrective bounce. Stay tuned for more.