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Litecoin Down 30% from Record High as Correction Continues

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Litecoin (LTC/USD) prices have seen heavy volatility over the past three weeks. Following a series of all-time highs, prices are down more than 30% in a synchronized global collapse instigated by China’s ICO ban.

LTC/USD Correction Wipes Out Early-September Gains

The LTC/USD peaked at $90.90 on Sept. 2, according to CoinMarketCap. At $90 a pop, litecoin’s market cap approached $4.8 billion as 24-hour volume peaked at more than $1.8 billion. Prices are down more than $30 over the past two weeks to reach the current level of $61.00. The token is trading within a narrow range at the start of Thursday’s session.

To be frank, litecoin was severely overbought at the start of the September following a month of lateral moves. The Relative Strength Index has since moderated below 50.00. More correction is expected in the coming weeks, as prices target the corresponding Fibonacci retracement levels between $60.00 and $51.00.

Crypto Meltdown Shaves $40 Billion Off Market Value

The major coins have declined sharply this month after Chinese regulators banned initial coin offerings (ICO), the crowdsourcing model that has taken the world by storm. China is said to be mounting a broader attack on the digital currency market, including an all-out ban on bitcoin exchanges.

The ban will only apply to trading of cryptocurrencies on exchanges, leaving OTC markets unaffected. Trading volume is expected to fall dramatically as a result, especially given China’s out-sized role in the crypto market. The country accounts for about 23% of bitcoin trades. It is also home to some of the world’s biggest bitcoin miners.

Digital currency is a contentious topic for Chinese policymakers, who have zero tolerance for any activity that undermines stability. The People’s Bank of China has intervened in the market on several occasions to evaluate the risks. For some analysts, the latest crackdown is a backhanded attempt at controlling capital flight.

Litecoin’s Future

As the fifth-largest cryptocurrency by value, litecoin has attracted a lot of attention over the past nine months. The bitcoin rival confirms payments faster and is more adaptive to up-scaling. Like bitcoin, the litecoin token is deflationary in nature because of the simple supply/demand logic that underlies it.

Just as bitcoin will have 21 million coins in its entire lifespan, litecoin will only ever produce 84 million. This finite supply is a big draw for investors.

Litecoin creator Charlie Lee says the major difference between bitcoin and altcoins is that the former will be used as a store of value, whereas the latter will be used for purchases.

Litecoin enthusiasts cite transaction speed, supply size and use case as the major catalysts for its expansion. These are also some of the more compelling reasons why they prefer it to bitcoin. However, as Melwin Philip of Seeking Alpha notes, there’s no reason why bitcoin and litecoin can’t be used in tandem.

Charlie Lee drives this point home when he describes bitcoin as “crypto gold” and litecoin as “crypto silver.”

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 462 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Stellar Lumens Update: Acquisitions and Retirement Accounts

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Stellar Lumens is in the headlines this week amid reports that it is negotiating to acquire a high-profile startup by the name of Chain. Meanwhile, a bitcoin IRA that lets users buy cryptocurrency for retirement added XLM to its list of available assets, potentially raising the investment appeal of the Stellar protocol.

Stellar Eyes Chain Acquisition

Fortune reported Wednesday that Stellar has been in talks to buy the San Francisco-based blockchain startup for $500 million. Citing anonymous sources, the report said the payment would be made in XLM, the seventh-largest cryptocurrency by market capitalization. No cash or equity will be part of the sale, which has yet to be finalized.

Although Stellar’s plan for Chain is not yet known, its interest in the startup is tied to its team of talented blockchain developers. Stellar founder and crypto trailblazer Jed McCaleb has a keen eye for talent, having founded Mt. Gox, eDonkey and Ripple XRP.

Chain develops enterprise-grade blockchain solutions, including ledger products that allow businesses to transfer funds in token format. The company raised over $43 million in venture funding from high-profile investors including Visa, Nasdaq, Citi Ventures and Blockchain Capital.

It is not entirely clear how the purchase would impact XLM’s market value. For current investors, the main concern is a wholesale dump of Lumens by Chain’s backers in the event that the sale actually takes place.

At a current price-per-coin of less than $0.23, the Chain acquisition would translate to roughly 219.3 million XLM. There are roughly 18.7 billion Lumens in circulation, giving the currency a total market cap of $4.3 billion.

Stellar for Retirement

The BitcoinIRA retirement platform has announced the addition of both Stellar Lumens and Zcash to its available list of cryptocurrencies, giving investors the ability to diversify their crypto holdings for retirement.

“[W]e’re excited to meet the high demand for both Stellar Lumens and Zcash in the marketplace by making these coins available to customers looking to diversify their retirement portfolios,” said Chris Kline, BitcoinIRA’s Chief Operating Officer.

In addition to Lumens and Zcash, the BitcoinIRA platform allows retirement planners to access bitcoin, Ethereum, Ripple, Litecoin, bitcoin cash and Ethereum Classic.

Crypto IRAs fall under a much broader category of assets called digital IRAs, which are self-directed retirement accounts. Cryptocurrencies are recognized by the IRS as property, which allows for their inclusion in retirement accounts. Self-directed IRAs have unique tax benefits that can help investors maximize their digital currency holdings.

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 (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 462 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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Crypto Update: Coins Drift Sideways as Trading Activity Plunges

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Liquidity dried up in the cryptocurrency segment in recent days, as trading volumes have been declining progressively, while the major coins got stuck in tight ranges. Only a few coins show signs of activity, and the bearish short-term patterns continue to dominate the market. With a group of currencies, namely Litecoin, Monero, Dash, and Bitcoin itself clearly dragging the segment down, the short-term trend will likely continue, as the previous leaders are now showing strength either.

While all of the top digital currencies are showing some gains today, and the total value of the market edged close to $290 billion, major resistance levels are still towering above. The fact that the effect of the Bithumb hack faded away quickly is a positive here, but until signs of bullish momentum and a clear leadership forming, the short-term outlook remains bearish.

BTC/USD, 4-Hour Chart Analysis

Bitcoin continues to trade near the $6750 level, edging ever closer to the declining short-term trendline, in a bearish consolidation pattern. Bulls would need a sustained move above $7000 to negate the declining trend, but for now at least a test of last week’s lows is likely with a possible move towards the key long-term zone between $5850 and $6000.  The short-term zone around $6350 level provides support, while further resistance is ahead near $7350.

Ethereum Nears Trendline as ETC Attempts Breakout

ETH/USD, 4-Hour Chart Analysis

Ethereum has been among the strongest coins in the last few days again, and coupled with its long-term relative strength, the second largest coin is still the best candidate to lead a recovery. That said, the coin still faces strong resistance between $555 and $575, and bullish momentum is suspiciously weak. Primary support is found at $500 with further zones near $450 and $400.

ETC/USD, 4-Hour Chart Analysis

Ethereum Classic has been positively diverging compared to the rest of the market, together with Binance Coin, and to a lesser extent Tron ever since its inclusion to Coinbase, and the coin moved above the key $16 resistance yesterday in late trading.

While ETC is slightly overbought from a short-term perspective, a consolidation above $16 and a subsequent move higher could confirm a trend change. For now, the short-term trend signal is only neutral, and traders should remain cautious given the broad downtrend in the segment

Featured image from Shutterstock

Disclaimer:  The analyst owns cryptocurrencies. He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 279 rated postsTrader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.




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Altcoins

Three Reasons XRP Is Not a Security: Ripple’s Garlinghouse

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Ripple CEO Brad Garlinghouse was a featured panelist at the CB Insights Future of Fintech conference in New York today. Chief among the themes in the discussion was XRP, the No. 3 cryptocurrency based on market capitalization in which Ripple owns the majority of tokens.

While the No. 1 and No. 2 digital currencies, bitcoin and Ethereum, respectively, were cleared from being regulated as securities, Wall Street regulators have yet to make a call on XRP.

“I think it’s really clear XRP is not a security,” Garlinghouse said in the session.

There is a misconception in the cryptocurrency community that Ripple controls XRP. In fact, XRP is a decentralized digital currency that Ripple uses in its cross-border payments product xRapid. They could just as easily use bitcoin except “ bitcoin transactions on average are 45 minutes in and 45 minutes out. So XRP is uniquely positioned to solve the cross-border liquidity problem,” Garlinghouse said. 

He went on to outline a trio of reasons why XRP should never be identified as a security.

  1. “If Ripple as a company shut down tomorrow, the XRP ledger would continue to operate.”  
  2. “If you buy XRP, you’re not buying shares of Ripple.” As a holder of XRP, you’re not entitled to dividends or equity. Even though Ripple owns more than half of XRP, it doesn’t give them control of the currency, he said, comparing it to the dynamic between Saudi Arabia and oil. “Saudi Arabia owns a lot of oil, but they do not have control of oil.” 
  3. Utility. “XRP is solving a problem. There’s no security in a utility,” he said, adding that he “looks forward to the SEC clarifying some things.

Crypto Exchanges

Garlinghouse was diplomatic about cryptocurrency exchanges like Coinbase that have yet to add XRP to their trading platforms. In recent weeks, Coinbase announced that it would begin supporting Ethereum Classic (ETC), while many in the cryptocurrency community have been wondering when the U.S.-based exchange will add support for XRP.

“XRP is listed on 75 exchanges around the world. It has expanding liquidity … The consumer speculator is not our target market. Our target market is financial institutions that we can solve big problems for,” Garlinghouse noted.

Crypto Rivalry?

Yesterday Ethereum Co-Founder and ConsenSys Founder Joseph Lubin, who was included among the panelists, took a swipe at rival coin XRP, suggesting it is “massively overvalued.” The same question was posed to Garlinghouse during his session about Lubin’s ConsenSys. Garlinghouse took the high road, saying he was “excited” about them, adding they’re “underrated.”

XRP is the third largest cryptocurrency, boasting a market cap of $21 billion compared to more than $53 billion for Ethereum and $115 billion for bitcoin. Garlinghouse’s outlook is that at least one bank will be using it by year-end.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 16 rated postsGerelyn has been covering ICOs and the cryptocurrency market since mid-2017. She's also reported on fintech more broadly in addition to asset management, having previously specialized in institutional investing. She owns some BTC and ETH.




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