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Litecoin price (LTCUSD) has been in trouble lately. The digital currency’s price is up by ~10% in the past three months while Bitcoin and Ethereum price have gained by ~20% and ~50%, respectively. In the past month, it has fallen by ~20% while Bitcoin and ETH have dropped by ~8% and ~12%, respectively.

The underperformance of Litecoin has seen it overtaken by newer digital currencies. For one, its market cap of about $3 billion is a far cry from its all-time high of more than $30 billion. Also, while it was the fourth-largest currency after Bitcoin, Ethereum and Ripple a few years ago, it has now crashed to the 12th biggest. It has been overtaken by upstarts like Tether, Binance Coin, Chainlink, and Cardano, among others.

“Why has Litecoin price tanked?” This is a common question. To answer it, we need to first understand what LTC is in the first place. For starters, Litecoin is a digital currency that enables people to send money faster and cheaply around the world. Indeed, transactions in the Litecoin network are usually faster and cheaper than those processed in the BTC network. Indeed, transactions in LTC are 20 times cheaper than those in BTC.

Therefore, the main reason why Litecoin price has struggled is because of low volume in the network. Today, very few people regularly think and use the currency. The same trend is true in the financial market. For example, as of this writing, the volume traded in BTC has jumped to more than $21 billion. That is a substantial volume considering that BTC costs more than $10,000. On the other hand, only $1 billion worth of LTC has been traded.

Litecoin technical outlook

The daily chart shows that Litecoin price has been under pressure since it moved below the important support at $50. The price is between the 23.6% and 38.2% Fibonacci retracement level. This retracement connects the highest and lowest levels this year. It is also being guided lower by the dynamic resistance of 25-day exponential moving averages. At the same time, the volume being traded has been relatively low and is presently below the 20-day moving average.

Therefore, due to the bearish pennant pattern being formed, I suspect that the current upward trend is not sustainable. As such, I see the price resuming the downward trend as investors test the next support at $41.45 and the May and June low of $38.

On the flip side, a move above the resistance at $50 will invalidate the bearish trend because it will send a signal that there are still more buyers in the market.

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LTCUSD technical chart

Litecoin price

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(Excerpt) Read more Here | 2020-09-30 01:55:00
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