- A new descent of 20% predicted for Litecoin
- LTC and BTC correlation remains strong
- Some investors still optimistic for new high at $750
YEREVAN (CoinChapter.com) — After weeks in the red, the Litecoin (LTC) chart hints at another bearish wave to set up a new low at around $104. The world’s 13th ranking cryptocurrency follows suit with its competitors in a downward trend with no sign of pullback in view.
The marker kicked off the week with a 6-day significant high at $139.69 and later plummeted to lower highs around $131. Analysts at Yahoo Finance suggest that LTC would have to cross at least the $135 mark to reach significant resistance levels. Otherwise, another new low at around $127.
The descending triangle breakdown since mid-May had predicted an overextended sell-off with support around a $145 low. In late June, the support was finally broken, and we made predictions on a lower bar. However, investors caught the downturn midway to prompt a possible bullish breakout.
While this upward trend prevailed for days, it would be no surprise to see another triangle form shortly. The digital coin price has been stagnating recently, but a bearish flag pattern has already formed. Another stop-loss signal is underway as this new pattern predicts Litecoin will drop by 20% in the coming weeks.
Why is Litecoin Declining?
It comes as no surprise that after reaching its all-time high in May at $414, Litecoin would fall hand in hand with other cryptocurrencies. At the time of writing, the correlation between LTC and BTC is 84%. Investopedia explains the strong co-movement with Bitcoin. These are closely resembling currencies, but Litecoin is more accessible and has lower transaction costs. Thus, it is more attractive for smaller-cap investors.
Consequently, any fundamentals analysis on digital gold reflects directly on LTC, with prices almost mirroring in movements. However, while Bitcoin has seen a bullish accumulation pattern recently, forecasts for Litecoin are not optimistic. Although, it has been outperforming the market leader by the pace of decline.
LTC fundamentals: what’s the story?
Besides fellow cryptos, a significant driver of price is the adoption by companies as a payment method. Said to be faster, cheaper, and more accessible than BTC, Litecoin was anticipated to take over the alternative payments market. The latest significant adoption was by PayPal in late March. Thousands of businesses, websites, and apps support the payment method now. So what prospects does digital silver have then?
Even after failing to replicate other currencies’ steep peaks in halving periods, Litecoin’s fundamentals remain healthy. With 100,000 active users and 40,000 daily transactions, the coin could still hold at higher lows and extreme predictions of above $750, according to analysts at PrimeXBT.