Litecoin Price Set for Huge Move in January 2020
- Litecoin is the sixth biggest digital asset in the world
- The coin hit a yearly high in June 2019
- Decreasing volume signals a big move is due soon
Litecoin (LTC) has been moving lower in the past six months, in line with the rest of the cryptocurrency market. It is currently ranked the sixth-largest digital asset with a market capitalization of $2.8 billion.
Certain technical indicators point out that Litecoin is preparing for a huge move in the coming weeks, however, the outlook for this altcoin is quite grim.
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In October, Litecoin celebrated its 8th birthday. Charlie Lee, the founder of LTC, shrugged off claims that his project is near bankruptcy.
Speculations surrounding Litecoin’s future are mostly inspired by its performance in the last six months. Prior to June, the LTC was the best performing digital coin of 2019 as it grew around 170% since the start of the year.
The Litecoin halving, a process that ensures a crypto asset will follow a steady issuance rate until its maximum supply is eventually reached, took place a few months back. Many analysts believe that halving results in the crypto asset moving higher.
In this case, the Litecoin halving took place in the first week of August. Before the process was eventually implemented, it seemed that traders took profits earlier which caused the LTC to drop lower.
Next big move?
Since June, the LTC has lost 75% of its value when it hit $36.10, a 10-month low, signalling to buy Litecoin.
The chart above shows a descending wedge pattern (two converging blue lines) which signals a consolidation of the price action. The main characteristic of this pattern is that the trading volume keeps on diminishing and the trading activity is slowing down due to narrowing prices.
In layman’s terms, the volume is a measure of how much the LTC has been traded recently. In this case, the decreasing volume shows a lack of interest in the asset. On the other hand, a rise in volume indicates higher trading activity.
On the chart above, the down-slipping red arrow shows an overall decrease in volume. The trading activity over the past couple of days is at the multi-month lows, which is not sustainable. Hence, the low volume indicates an impulsive move may occur very soon.
Since this is a descending wedge pattern, the chances that the next big move is to the upside are higher. An impulsive move higher may take the price to above $50, from the current $41.