Litecoin initially tried to rally on Wednesday but gave back the gains to show less than bullish behavior. Ultimately, Litecoin is in a downtrend and much like the rest of the crypto markets, looking for some type of bottom. That being said, the bottom is nowhere to be found and I do think that we will go much lower from here. The candlestick from last week that ended up forming a hammer showed that the $60 level could be a bit supportive, but I think it is probably somewhat limited in its support.
Litecoin is going to follow the rest of the crypto markets, and by extension, Bitcoin. It is Bitcoin that calls the shots for the rest of the crypto markets, and until we can get some time of bullish momentum in the market, smaller coins such as Litecoin will continue to fall. While ironic, the reality is that crypto is a risk asset, and not nearly as “decentralized” as a lot of fanboys had hoped. This is what happens when institutional money comes into the marketplace, it starts to act like every other asset. You need to understand that institutional traders do not care about the use case scenario of Litecoin, Bitcoin, or even Ethereum. What they are concerned about is volatility and return on capital.
As volatility has gotten out of hand when it comes to risk assets, money flows out of places like Bitcoin and into safer spots. At this point, just about anything is safe in comparison to the crypto markets, so please keep that in mind. Ultimately, this is a market that has a major ceiling at the $100 level and is not until we break above there that you can take any rally seriously. Furthermore, you would need to see at least three days in a row of bullish pressure in Bitcoin, perhaps even strong ones to show conviction. Pay close attention to volume, as it can give you a bit of a “heads up” as to where we go next.
A breakdown below the bottom of the hammer from last week opens up a move down to the $50 level, and then eventually the $40 level after that. Crypto is in a bit of a freefall, and you have to look at rallies as a potential selling opportunity going forward.
