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Bitcoin’s Biggest Rival? Litecoin Stabilizes After Massive Correction

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After a volatile 24 hours, Litecoin prices showed signs of stabilizing Friday as investors speculated about the digital currency’s ability to de-throne bitcoin.

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LTC/USD Price Levels

The LTC/USD exchange rate plunged 26% on Thursday to touch the lower $74 level. At the time of writing, prices had recovered near $82.50 for a total market cap of around $4.5 billion. The cryptocurrency had virtually doubled between Nov. 2 and Nov. 29 in a period of general euphoria for cryptocurrencies.

Litecoin wasn’t the only digital asset to suffer a double-digit correction earlier this week. Bitcoin Cash and Ethereum also plunged more than 20% on Thursday. Both currencies found stability on Friday, although Bitcoin Cash was still headed for weekly declines of more than 20%.

Litecoin’s precipitous drop followed another record-setting surge that took prices above $100 for the first time ever.

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Turnover in LTC trades has reached $429 million in the last 24 hours. About one-fifth of the activity was concentrated on the GDAX exchange. Bitfinex and South Korea’s Bithumb also saw roughly 11% of the daily volumes.

Bitcoin Rival?

The cryptocurrency market was in a state of buzz Thursday after The Motley Fool ran a compelling story about Litecoin’s potential to overtake bitcoin.

Litecoin’s price trajectory since the start of the year has largely mirrored the broader cryptocurrency market. However, its exposure hasn’t come anywhere near bitcoin’s or some of the other leading altcoins. According to Motley Fool writer Sean Williams, this has more to do with creator Charles Lee taking a back seat in the development of the token. Recent developments suggest Lee is now ready to put his full weight behind the project.

“Litecoin certainly has what it takes to give bitcoin a run for its (virtual) money,” Williams said. “Recently, Litecoin completed the highly anticipated SegWit upgrade, which has been critical in improving the capacity of its blockchain, hastening settlement times, and reducing the costs to process transactions. Doing so should help attract businesses and, perhaps, investors.”

It didn’t take long for the Litecoin Foundation to temper expectations about the coin’s potential. In a Nov. 29 tweet, the Foundation said it doesn’t believe its cryptocurrency is the biggest competitor for bitcoin. It also reiterated its focus on transaction processing.

“Bitcoin and Litecoin will have different focuses. Litecoin will definitely focus more on payments,” the tweet said.

Despite vastly different market caps, bitcoin and Litecoin share many similarities. Both algorithms put a hard cap on the number of coins that can be created. They’re also much older than the latest wave of altcoins sweeping the market. Whereas bitcoin was created in 2009, Litecoin came on to the scene in 2011.

For a long time, LTC was the no. 2 cryptocurrency in terms of market value and overall trading volume. Despite slipping to the likes of Ethereum, Bitcoin Cash and Ripple XRP, Litecoin is still considered to be the silver to bitcoin’s gold.

Bitcoin prices spiked above $11,000 on Thursday for the first time in its history. Prices have since moderated back down to the mid $9,500 region.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. 

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Trade Recommendation: XMR/BTC Pair Throwback

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The XMR/BTC market (Monero) has been in downtrend on the hourly chart after posting a high of 0.0225 on December 6 and failing to hold critical support at 0.02. It went to as low as 0.0145 on December 8 before respecting RSI at 32 where it established support. The market used the new support level to rally and generate one higher low after the other. It recently attempted to reclaim support at 0.02 but was repelled by bears. Currently, the market is trading around 0.019 levels where it appears to have created another higher low.

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Technical analysis shows a large reversal pattern in the hourly chart that can take the XMR/BTC pair to 0.025. Even though the market failed to breach resistance at 0.02, investors should not see it as a failed breakout. What we’re seeing is a throwback which is a temporary retreat in price. Throwbacks are common in breakout plays and are often seen as a bullish signal. The next time the market attempts to breach 0.02 resistance, it has a much better chance of breaking it with conviction.

The strategy is to buy breakout at 0.02 with immediate stop at 0.0189.

Hourly XMR/BTC Chart on Poloniex

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As of this writing, XMR/BTC is trading at 0.018714 on Poloniex.

Summary of Strategy

Buy: breakout at 0.02

Target: 0.025

Stop: move below 0.0189 after buying breakout at 0.02.

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Trade Recommendation: FCT/BTC Bullish Reversal

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The market reach its all-time high back in June this year when FTC/BTC (Factom) reached 0.01463162. Unfortunately, the pair wasn’t able to sustain its momentum. It created a lower high several days later at 0.01066744 which signalled investors to take profits or cut their losses. As a result, the market tumbled and lost 93.17% in value from its all-time high. Such a tremendous loss would have created an atmosphere of despair in the market. Usually, that’s when the savviest traders come in.

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Technical analysis reveals that the worst is behind the pair. FCT/BTC touched support at 0.001 on the daily chart twice and respected it on both occasions. This is a good indication that the market has found a reliable support level. In addition, hourly chart shows that a large reversal pattern is underway. The pair may have retreated when it nearly touched 0.002, but it generated a new higher low in the process at 0.00156566. The throwback is a bullish signal that enables the pair to gather momentum to break resistance at 0.002.

The strategy is buy on breakout at 0.002. Breach that level and the market reclaims 0.003. Sell that level because it is a strong resistance.

Hourly FCT/BTC Chart on Poloniex

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As of this writing, FCT/BTC is trading at 0.001738 on Poloniex.

Summary of Strategy

Buy: breakout at 0.002

Target: 0.003

Stop: move below 0.0018 after buying breakout at 0.002.  

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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Trade Recommendation: ETC/BTC Pair Bottoming Out

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The ETC/BTC market has been in a downtrend after it generated a high of 0.00931529 in June and failed to hold support at 0.006 on Poloniex. Bears repelled any meaningful rally and sent the market to as low as 0.00129881. Fortunately for the bulls, it appears that the pair may have found its bottom.

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Technical analysis shows signs of selling exhaustion. First, ETC/BTC went into extreme oversold territory when the price reached 0.00129881. Second, and more importantly, the market revisited that level recently after it corrected from its move above 0.003. When the pair tested support, 0.00129881 was held even though the volume was twice its daily average on Poloniex. These indicators suggest that the pair has bottomed out.

The strategy is to buy between 0.00129881 and 0.002. Take note: the market is still in a downtrend, but there’s an opportunity to generate profits by trading the range. Sell when the market touches 0.0032.

Daily ETC/BTC Chart on Poloniex

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As of this writing, the market price of ETC/BTC is 0.00179752.

Summary of Strategy

Buy: between 0.00129881 and 0.002

Support: 0.00129881

Target: 0.0032

Stop: Move below 0.00129881

 

Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest money you can't afford to lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here.



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