Yerevan (CoinChapter.com) — Litecoin crossed $400 for the first time since its launch in 2011, confirming an actively rising euphoria in the cryptocurrency market as investors look for profitable ventures outside the traditional financial space.
The emerging digital assets market added up to $1.78 trillion to its capitalization in 2021 only. Every top-cap asset, including Bitcoin, Ethereum, XRP, Cardano, and others, performed better than expected. But the biggest takeaway was Dogecoin, whose gains surpassed 14,000 percent at one point in time last week, on repeated endorsements from billionaire entrepreneur Elon Musk.
Read More: Dogecoin Dives after Elon Musk Calls It A ‘Hustle’ on Saturday Night Live
Litecoin, which makes up around only 1 percent of the entire cryptocurrency market capitalization, waited for its turn before logging massive upside rallies. The silver crypto closed the first quarter of 2021 about 58 percent higher, logging a comparatively dwarfed upside performance compared to other top tokens. Nevertheless, rotational trading out of overvalued cryptocurrency helped park capital into the Litecoin markets.
For instance, Dogecoin’s 33 percent crash from its record high of $0.816 coincided with the Litecoin price rally. The last 24 hours alone saw DOGE/USD crashing by 12 percent and LTC/USD rising by 18 percent.
Litecoin Overbought?
The LTC/USD exchange rate reached $413.91 on Tuesday, logging its record high. The pair’s massive upside move pushed its relative strength index (RSI), a price vs. momentum-gauging indicator, above 70, a threshold above which traders consider an asset as overbought.
It raises the possibility that Litecoin, like its overvalued peers, might face some degree of price correction in the sessions ahead. While that does not guarantee bullish exhaustion, it still poses a heavy amount of risks for traders planning to long LTC/USD at its current top levels.
From historical point of view, the Litecoin daily RSI now is at an inflection point.
Read More: Litecoin Approaches Record High On Altcoin Season Hopes; What’s Next?
The next bearish correction eyes $331.97 as intermediate downside target, for the level has served as support during the early May session. Meanwhile, an extended sell-off, prompted by profit-taking sentiment, could have the Litecoin price test its 20-day exponential moving average (green) as support.
If the cryptocurrency continues its move higher then analyst expects it to test $500 as its primary upside target.
Yashu Gola is a Mumbai-based finance journalist. He is profoundly active in the bitcoin space since 2014 – and has contributed to several cryptocurrency media outlets, including CoinChapter, NewsBTC, FxDailyReport, Bitcoinist, and CCN. Academically, Yashu holds a bachelor's in information technology, with majors in data structures and C++ programming language. He has also won the 'Atulya Award' for his efforts towards raising $100,000 for an India-based farming project.
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