Litecoin struggles to break past $80 as the market is still cautious following regulatory changes.
- Litecoin’s price fell after looking like it was rallying.
- $76 and $80 look like key support and resistance levels.
- The announcement of a new partnership and a stake in a German bank did little to stop the price decline.
The last few days, following LTC, shoes how tough it can be predict what’s going to happen in the market. Last week, I said the price fall we’d seen over previous weeks had been arrested and that $100 could be back in play for Litecoin.
That is not what has happened.
Instead, after after jumping from $80 to $86 on Sunday, the price of PTC declined over the next three days, dropping about $11 to sit at $75.80. The price has sat in the $75 to $80 since then with $80 remaining a significant resistance level. Fortunately, at this stage, the $75 support level is holding.
Traders are hanging back. Peak trading volumes of the last week have maxed out at around $330M/24hr. That level was the low-volume mark just a month ago, when we were routinely seeing $500M/24hr being broken. We’re now seeing volumes closer to the $200M/24hr mark as the market is in a quiet phase.
John Isige, from FXStreet, summed things up yesterday when he said “Virtual currencies are currently recording losses by large margins. However, it is not clear what is the cause of the current declines is”.
The Litecoin Foundation’s announcement of a strategic partnership with the TokenPay project, to buy a stake in the Germany’s WEG Ban AG did little to boost the value of the market’s sixth most valuable coin by market capitalisation.
I think looking only inside the actions of traders is missing part of the story. The proliferation in the number of different coins has many people wondering where the value for each platform lies. Regulators around the world are starting to exert influence over exchange behaviour, how coins are treated within tax systems and cleaning out of less scrupulous players in the markets. Those factors are attracting a broader cross-section of traders including cash-rich institutional investors.
That means the market is undergoing some degree of transformation. I think the up and down pattern we’re seeing will be normal until the end of this year as the regulatory environment and types of traders in the cryptocurrency markets evolve further.
Where does that leave LTC today? A narrow trading range of between $76 and $80 seems to be what many analysts, like those at Ethereum World News are suggesting. Despite provide a look at the market that’s chock full of technical detail, their position can be summarised as more of that we’ve just seen over the last few days.
Disclosure: At the time of writing, the author holds BTC, EOS, ETH, XLM, ETN, LTC, ADA and XRP.
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