Litecoin Price Analysis: LTC/USD Forms a Double Bottom; Here Come the Bulls
- Bullish signals demonstrated with recent technical double bottom formation.
- Unusually high Litecoin transaction spotted, raising much speculation within the market.
There may just be some room now for the bulls to run higher. LTC/USD over the past two weeks has been subject to depressed trading. Upside has been very much capped, short-term rallies are being sold and the range has been tight. This all comes as the price was looking to stabilize, following the hard selling that hit the market in November. A whopping 50% was whipped off the price during that period. A bottom has formed over the near-term and this is seen around the $28-$27 territory. As a result, the daily candles on the 25th November and 6th December, have formed a double bottom.
Litecoin is ‘Flippened’ by Tether (USDT)
Litecoin continues to slip down the market capitalization ranking. The latest move has seen Tether (USDT) ‘flipping’ Litecoin, moving into the 7th ranking spot. At the time of writing, USDT has a market cap of $1.85 billion, versus LTC at $1.77 billion. This move coming with the chunky drop in Litecoin’s market cap on Wednesday. This was seen around the $1.9 billion mark. Tether (USDT) didn’t have much in the way of movement during its peak on Wednesday (the size was noted at the $1.84 billion mark). Therefore, it is a big thanks to the plunge in Litecoin for the ranking shift.
Unusually High LTC Transaction Volume
It has garnered attention via the social media space that a large amount of transaction volume and value had recently been spotted. Roughly $1.16 billion worth of Litecoin had been transacted on the 30th November. On the back of this, closely followed Weiss Ratings tweeted, “New Litecoin whale emerges? Nov. 30, about 35.4 million LTC, 60% of coin supply, totalling $1.1. billion, reportedly moved by one entity. This shows how centralized some darlings of crypto like LTC are, not good”. The speculation continues as to where all of this LTC went and why.
It is worth noting that it is rare to see more than $1 billion of trading volume on the Litecoin network. This has not been seen over $1 billion in a single day since February 2018, a time when there was much panic and FUD hitting the market. As of now since this period in February, the Litecoin network has seen an average of around $100 million in trading volume per day. Seeing such excessive spikes in volume well outside of the average is of course going to raise some eyebrows and speculation.
Technical Review – LTC/USD
LTC/USD as touched upon has with the most recent daily candle stick, produced a double bottom formation. The bulls need to push for a strong bullish green close to confirm the conviction of this double bottom bounce. A failure will likely ignite further selling pressure to force a breakout to the downside. As a result, the critical near-term area of $28 could be breached, leaving the door wide open to a fresh wave of bears coming in. Eyes are on the neckline of this mentioned formation, this is observed up within $35-36 territory.
Should enough momentum be gathered to the upside from the bulls, then an extension through the neckline area could very well be seen. A move above the $35-$36 could result in a very fast move back towards a reclaim of the psychological $50 mark. LTC/USD last traded here on 14th November, during a period of strong selling momentum. The next likely challenge would be the pre-November drop levels. This is seen around $57, the high area of 7th November. LTC/USD was seen here right before the bearish trend kicked in.
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.
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