The Litecoin market fell to test the bottom of the hammer from the Monday session and threaten the $100 support level. The $100 support level is an area that should continue to be important, and I think it is also best thought of as a “zone of support” that extends down to the $95 level, so we need to break through all of that in order to get aggressive to the downside. If we do break through all of that, it would be a very negative turn of events and could send this market racing lower.
Looking at this chart, it looks as if we are getting pretty close to breaking down, and with the strengthening of the US dollar, it does make a lot of sense that we would perhaps see Litecoin get crushed. Furthermore, Bitcoin has struggled in general, so I do think it also makes sense that we would see negativity in this market anyway, and I think at this point you cannot be a buyer of Litecoin. If you have the ability to short this market, then below $90 could offer a massive opportunity. That being said, I would not get aggressive at this point, and I do think that it is more likely than not that we wlll get a lot of choppy behavior in the short term more than anything else. Ultimately, given enough time I do anticipate that this is a market that will probably continue to look anemic, so I am not overly excited about being involved in it at the moment. This market will continue to be very noisy, but it may give us an opportunity to pick up Litecoin at extraordinarily low levels.
We need to be cognizant of the fact that there is a very real possibility of a “crypto winter” coming, which is when crypto markets do almost nothing but make people nauseous. If that is the case, then you need to start thinking along the lines of investing, and a lot less about trading. If we break down below $95, I anticipate that Litecoin will drop to the $75 level rather rapidly. The market struggling in the way it has does not give me enough confidence to be a buyer of Litecoin anytime soon. Because of this, I do not have a scenario in which I am a buyer.
