Litecoin (LTC) pumped hard last week and was the biggest gainer in the top 20 cryptos. However, like all other crypto pumps, there is always the possibility that it could dump. Litecoin (LTC) already seems to have plateaued in the past 24-hours, an indicator that the momentum that pushed it to last week’s highs has died down. So how is it likely to play out this week?
Well, Litecoin’s prospects this week depend on whether it can hang on above the weekly 200-day moving average at $43. For the last 2-months, Litecoin (LTC) has been trading below this price level, and it was acting as a major resistance level. However, last week’s pump pushed Litecoin (LTC) above this level before it rescinded back to it.
If Litecoin (LTC) holds up above this level for the next 24-48 hours, then chances are that it could continue gaining and possibly enter into a medium term Bull Run. That’s because, it would indicate that bulls are still strong in the Litecoin (LTC) market. It would also be a confidence boost to investors standing on the sidelines, waiting to see Litecoin’s next move, and drive up the buying volumes.
However, in the event that Litecoin (LTC) drops below this price level in the next 24-48 hours, it would be a signal that bears are back in control. This could see Litecoin (LTC) drop much further than its pre-pump lows for two reasons. First, it would a signal that bears are back in control, and this would see the exit of those who had gone long last week. This selling pressure would see the value of Litecoin take a huge plunge. Overall weakness in the entire market could add to a decline in the price of Litecoin (LTC).
Then there is the fact that, after last week’s price run-up, investors would be expecting a massive decline in prices. As such, if the price drops below the weekly 200-day moving average, it would be an indicator of weakness and the number of people shorting Litecoin (LTC) would increase. This would add to the bearish momentum on Litecoin (LTC) and drive down the price, and there is no major support to the downside up to around $20. As such, a high number of short orders could lead to a huge freefall in the value of Litecoin.
In essence, the short-term value of Litecoin (LTC) is heavily dependent on how it moves along the weekly 200-day moving average. Nonetheless, the long-term trajectory of Litecoin (LTC) is upwards. There is so much going on with Litecoin (LTC) that its chances of success are very high. For instance, the Litecoin Lightning network has grown exponentially, which is a plus to the long-term adoption of Litecoin (LTC). On top of that, the Litecoin halving in August will increase the difficulty and play into Litecoin (LTC)’s supply and demand dynamics. As bullish sentiment grows in the entire market, this could see the value of Litecoin (LTC) gain exponentially.