Litecoin continues to look vulnerable, although we did gain a minuscule amount Friday. The $40 level underneath continues to be supported, and I just don’t see how we don’t break through there eventually. Crypto’s dead and will be for a couple of years at the rate things are going. You cannot have this much fraud in an asset class and have people believing that it is something that they should invest in.
We are starting to see yet another Ponzi scheme come undone during the day, this time in Babel. This is another “crypto financial services firm” that has suspended client withdrawals. In an environment like this, nobody wants to be bothered with an asset that can suddenly disappear. This is a fresh concern after Celsius did the same thing just five days before. In other words, the crypto space is coming undone, and the smaller coins such as Litecoin are going to continue to get punished as a result.
It’s not necessarily that Litecoin has done anything, it’s just that people were running away from this market. With Bitcoin almost certainly breaking below $20,000 this weekend, it’s difficult to imagine that Litecoin is going to have a good go. Once we break below the $40 level, Litecoin more than likely will go to the $20 level next. After that, we could be talking about single digits, possibly even zero before it’s all said and done.
After all, in an environment like this, a lot of ecosystems will have to disappear. Venture capital has completely left the space, so now it’s going to have to actually prove itself to be worthwhile. It’s been over 10 years, and we have yet to find a day-to-day use for crypto, so I suspect we’ve got a couple of years of nothing.
Having said that, if you are lucky enough to build up a position in an ecosystem that comes up with something in the real world, you are probably going to make a fortune. The biggest trick right now is figuring out which one that’s going to be. It’s almost certainly not going to be Litecoin, or any of the other alts in the near term. Because of this, the only thing I would do in this market is either short it, or avoid it altogether.
