LiteCoin (LTC/USD) Analysis December 12, 2017

on Dec 11, 2017
Updated: Sep 19, 2019

If anything, LTC prices are driven more by fundamentals than technical indicator patterns.

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We all know how Litecoin is BTC’s silver and because of the small participation level in the former, LTC is often a “lab” for BTC. Most experiments are first tested on LTC and if successful, it is implemented on BTC core software. Segwit was enforced on LTC network after a 75% consensus level was reach and is now proving successful transaction wise.

 Now, as BTC onboard more people, the issue of speed and transaction settlement is becoming a threat to the very existence of the network. For example, as BTC prices peaked last week, 250K transaction had not been cleared in the Bitcoin’s network mem-pool while transaction fees topped $20.

LTC on the other hand remains fast and news is that they are there is a rigorous marketing plan in place aimed at merchants and other users who desire fast settlements and low fees. Moreover-and another reason to buy LTC has to do with the recognition of the cryptos as investment tools by South Korea where LTC has a massive following.

To top this up, there is a rumor that a new exchange will be formed outside China to specifically cater for Chinese traders who are suffering from artificial illiquidity because trading is strictly over the counter. As noted, LTC volumes dipped after the ICO ban and it is now emerging that Chinese prefer LTC over BTC and if this is the case as we shall see, LTC prices will likely get pumped.

From last week’s trade strategy, we insisted that it was important for LTC prices to close above $100. It did but instead prices exploded, testing highs of $199 and past $155 which happened to be our first take profit level.

Momentum in the weekly chart is high and price action is banding along the upper BB with a stochastic buy signal in place.

Going forward, we shall keep a close eye on our new support at $155 and of course the 20 period MA which is trying to keep up with bull pressure.

In the daily chart, we can see that after two days of upswing which saw more that 50% increment of LTC prices, momentum is now slowing down.

Already, we have a sell signal in place and yesterday’s candlestick closed above the upper BB and should that be confirmed today, then our first support should be the 20 period MA.

Trading this pair in the 4HR chart will be easy.

Bulls are in charge and after an over extension in the daily chart, prices corrected. There is a buy signal in place and we shall wait for price action to close strongly above $165 and the minor resistance trend line before we enter long. This cautious approach is because of that bullish over extension in the daily chart and a possibility of further lower lows.