Litecoin crashes to its lowest level against Bitcoin on Binance; here’s why?

Key Takeaways:

  • Litecoin fell to its lowest ever against Bitcoin on Binance.
  • Bitcoin’s growing dominance and excitement over BTC ETFs can be reasons for the all time low LTCBTC prices.

NEW DELHI (CoinChapter.com) — Litecoin (LTC), the peer-to-peer cryptocurrency, reached an all-time low against Bitcoin on Oct 12. Founded by former Google engineer Charlie Lee in 2011, Litecoin aimed to become the “silver” to Bitcoin’s “gold.”

LTC provides a payment avenue for people anywhere in the world without an intermediary. It is currently the sixteenth largest cryptocurrency with a market cap of $11.8 billion. However, the LTCBTC pair moved below 0.0030 BTC on Tuesday, a level it last visited in Mar 2017.

Crypto trader Scott Melker shared a tweet highlighting LTC’s misfortunes. Bitcoin’s recent rise and the buzz surrounding BTC ETFs combined with Litecoin’s absence from news might be the reasons behind LTC’s decline.

Bitcoin’s Growing Dominance

Bitcoin started Oct trading near $44,000 price levels before galloping to $57,000 within 11 days. Although BTC prices pulled back to trade near $55,000 on Tuesday, the OG crypto gained 26.8% in Oct. In comparison, LTC has gained only 11% in the same duration.

Litecoin’s rally coincided with Bitcoin’s but lost momentum within five days. Since Oct 5, LTC struggled to break above resistance formed by its 200-day Moving Average trendline, trading between $169 to $182. As such, a strengthening Bitcoin has lowered the value of the LTCBTC pair.

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Furthermore, increased institutional interest also drove BTC prices up. Litecoin has failed to attract similar interest. The third-largest bank in America, the U.S. Bank, recently announced crypto custody services for Bitcoin, adding to the bullish tailwinds that BTC is currently enjoying.

Increased U.S inflation rates coupled with Fed’s taper scare also pushed people towards Bitcoin. Additionally, Fed chair Jerome Powell recently confirmed the U.S doesn’t plan to ban crypto, like China, further pushing Bitcoin prices.

A lower LTCBTC price level indicates that investors can 1 LTC would cost lesser BTC. At present, BTC has a market dominance of 45.65% on the overall crypto market.

ETF Excitement

An Exchange Traded Fund, or ETF, is an investment vehicle that provides investors exposure to an underlying asset or index. For example, a Bitcoin ETF would track the price movements of BTC.

The U.S Securities and Exchange Commission recently approved an ETF by Volt Equity. The fund, named Volt Bitcoin Revolution ETF, would provide retail investors exposure to Bitcoin by creating a portfolio of companies that generate revenue from Bitcoin-related activities or hold a large amount of BTC in their ledgers.

Also Read: Billionaire investor Bill Miller bats for Bitcoin as BTC crosses $57k.

Although Volt Equity’s ETF is not a purely Bitcoin ETF, it is the closest investors have come to one. Meanwhile, the SEC is scheduled to provide a judgment on VanEck Bitcoin Trust’s approval. In detail, VanEck is the earliest purely BTC ETF whose approval request is pending with the regulator.

The SEC previously approved a Bitcoin futures-based mutual fund from Proshares. The fund would invest in Bitcoin Futures, a format that the SEC indicated could be received favorably by the regulator. Moreover, Bloomberg reports that the SEC may be poised to approve as many as four Bitcoin ETFs within a few weeks.

Source: Bloomberg
Source: Bloomberg

Investors see Volt Equity ETF’s approval as a positive sign for Bitcoin ETFs, driving retail and institutional interest in BTC.

Litecoin Light On Hype

Litecoin’s social media engagement is very low in comparison to Bitcoin. For example, Litecoin recently announced BRD wallet users could use LTC for payments at Verifone merchants. Along with BitPay and Blockchain Wallet, BRD becomes the third wallet to support Litecoin.

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However, the announcement failed to generate any buzz, as the news failed to spread. Similarly, Litecoin announced energy drink brand Juggernaut Energy would support LTC payments. Again, however, due to a lack of social media buzz, LTC prices failed to react to the news.

Litecoin vs. Bitcoin Social media volume. Source: Santiment
Litecoin vs. Bitcoin Social media volume. Source: Santiment

As the chart shows, Bitcoin’s social media volumes are miles ahead of Litecoin. With a lack of hype, buying sentiment stagnates, leading to weakening price action for LTC. The last major press LTC got was when rumors of its partnership with Walmart started flying in Sept.

LTC needs a sustained bull run and improved social media engagement if Litecoin bulls plan to improve the LTC/BTC pair’s prices.

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