LitePay Failure Weighs on Litecoin as Prices Enter Oversold Territory
The value of Litecoin declined sharply on Monday after Charlie Lee confirmed that the LitePay merchant processor has ceased operation one month after its scheduled launch.
LTC/USD Price Levels
Litecoin fell as much as 11% on Monday, touching a session low near $142. After a brief recovery, LTC/USD was back to trading near the Monday low. At the time of writing, Litecoin was valued at $143.11.
The digital currency is severely oversold, based on the Relative Strength Index (RSI). Initial support is located near the Mar. 18 swing low near $137.
The digital currency continues to hold the no. 5 spot on the market cap leader board with a total value of $8 billion, according to data provider CoinMarketCap. Trade volumes over the past 24 hours surpassed $413 million on a total circulating supply of 55.8 million LTC.
OKEx was the biggest market for LTC tokens, with more than one-quarter of daily turnover taking place on the exchange. The other active exchanges for LTC included GDAX, Bitfinex and Huobi.
LitePay Ceases Operations
The Litecoin Foundation confirmed on Monday that LitePay had ceased operation and was in the process of being liquidated by CEO Kenneth Asare. The foundation, which operates as a not-for-profit, had a falling out with Asare over his “less than transparent nature with the company.” In particular, he requested additional funding for LitePay without providing an adequate explanation of where the original funds had been spent.
Litecoin founder Charlie Lee also issued an apology for pumping the project without doing his due diligence:
“Like everyone else, we got too excited about something that was too good to be true and we optimistically overlooked many of the warning signs. I am sorry for having hyped up this company and vow to do better due diligence in the future,” Lee tweeted from his @SatoshiLite handle.
We speculated last month that Litecoin could be one of the most undervalued coins in the top-ten. Although that might still be the case, bullish sentiment was largely tied to excitement around the launch of LitePay and the promise of scalability and instant transactions. LitePay had been described by some analysts as a “game-changer” for bringing instant payments to the merchant community.
Litecoin rallied nearly 40% in mid-February in anticipation of the LitePay launch, which was originally scheduled for Feb. 26.
Despite the recent drop, Litecoin’s performance hasn’t lagged the broader market by any noticeable stretch. LTC is down 31% for the month of March and 43% year-to-date. By comparison, the global crypto market cap has shed 30% this month and 48% since New Year’s day.
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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