Although the bears have driven the LTC price increasingly low in recent months, the reduced transaction volume might have influenced a trend change. Despite the recent rally of Litecoin, the correction may extend and take the price back to USD 41.
The high drop that Bitcoin (BTC) has suffered in the first half of the year has also affected altcoins like Litecoin (LTC). However, the selling pressure might be decreasing, suggesting an excellent time to invest for the medium to long term.
Former Google engineer Charles Lee created LTC in October 2011 by adapting and modifying the Bitcoin open-source code. Like the pioneering cryptocurrency, no central authority controls Litecoin. However, they differ because the latter has a faster block generation rate and uses Scrypt as a proof-of-work (PoW) scheme.
LTC has strongly resisted the current fall in prices in the crypto market. It is trading at around USD 49.54 and has accumulated a 0.4% gain over the last 24 hours. While its daily trading market is above USD 318.97 million, its market capitalization is about USD 3.50 billion, according to CoinGecko.
Litecoin Resists the Drop while Its Transaction Volume Decreases
The bears have controlled the market over the last few months, driving prices increasingly low. However, the reduced volume of transactions could be a relevant factor influencing a change in the trend. Besides indicating a lack of interest among traders in trading, it may simply suggest decreasing interest in Litecoin.
Other crypto assets offer more advantages than LTC, like lower transaction fees and higher transaction capacity per second.
In addition, several South Korean exchanges recently stated they would not trade Litecoin anymore. Therefore, it is common to see a decrease in withdrawals and deposits of the cryptocurrency. Over the last few days, Binance also announced that they could not validate the address of those sending transactions with MimbleWinble.
The Technical Analysis of the Litecoin Price in the Short Term
The 4-hour charts show that the correction in the price may extend despite the recent rally of Litecoin. Even so, the bulls are defending a relevant support zone, which they should not lose to prevent LTC from reaching USD 41 again.
It is relevant to know that the candlesticks are at the average levels of the ENV channels. In addition, they are in the lower part of the parallel channel. That suggests that there might be a bounce to the upside in the short term.
In addition, the Relative Strength Index (RSI) is at 30 points and has moved sideways in that area, coming from oversold readings. However, the Moving Average Convergence Divergence (MACD) is in a similar position. However, the moving averages of both indicators point to the downside.
In the short term, the bulls may defend the current level and sideline the trend around USD 60. However, if the price breaks below the parallel channels, the selling pressure would put LTC at USD 41. Therefore, investors should be attentive to what might happen within the next few hours.
By Alexander Salazar