Litecoin (LTC) rose above the rest of the cryptocurrency market as the FTX collapse dragged down the entire sector. To begin, there is nothing novel about the way the altcoin works or the benefits it promises. The concept of a cryptocurrency that could facilitate transactions at a faster pace and at a lower cost than Bitcoin (BTC) was an appealing one, and the coin has performed admirably since its introduction to the market. Although Litecoin had solid foundations, those were not sufficient to keep LTC in the top 10 by market cap as time progressed.
The decline in Litecoin’s market cap can be traced back to the cryptocurrency’s decline in popularity due to factors such as its lack of recent news coverage, the difficulty of implementing its promised privacy features, and the introduction of more scalable cryptocurrencies. Privacy on the LTC network was met with skepticism because of the network’s reputation as an antiquated blockchain. This is because, eventually, cryptocurrency exchanges will stop trading anonymous assets due to regulatory pressure.
The pre-halving run may have played a role in LTC’s increase. The anticipated date for the halving of Litecoin’s issuance is July 2023. For both the 2015 and 2019 halvings, the months preceding the event saw a surge in bullish cryptocurrency trading. This shift resulted in a higher value of LTC relative to the US dollar in 2022. With respect to Bitcoin, Litecoin did quite well, increasing by 50%. As an added bonus, Litecoin is a cryptocurrency whose underlying technology is very similar to Bitcoin’s. Some of the optimism surrounding the dominant cryptocurrency may have transferred to LTC after the FTX crash.
LTC’s price rally has been sparked by MoneyGram’s choice to include Litecoin in its crypto offerings and the coin’s impending halving event. One of the few bright spots for the cryptocurrency market that had to deal with the consequences of the failure of the FTX exchange platform was Litecoin (LTC). LTC briefly showed signs of vulnerability while experiencing one of the worst implosions the market has ever seen, falling all the way to $49.58. Even though Bitcoin and Ethereum fell to their lowest points of the month, Litecoin stayed strong and eventually started its own rally, which helped it end November on a high note. As a result, Litecoin finished last month with an index price of $76.52 and demonstrated a remarkable increase of 24% over the previous 30 days. Let’s take a look at possible scenarios.
Bullish Case: The FTX collapse in the first week of November and its detrimental effects on the larger crypto market caused the LTC breakout to lose momentum. However, amid rumors that its reward would be cut in half in the summer of 2023, Litecoin resumed its upward trend. A run-up toward $100, or an additional 20%, is anticipated in the coming months or weeks for the LTC/USD pair, provided that the price of Litecoin doesn’t fall below the $63 support level.
Bearish Case: LTC carries with it the lack of trust of older investors in the crypto market in addition to not having fundamentals that fit the current market. That’s because cryptocurrency’s creator Charlie Lee sold his holdings in 2017 just before the altcoin’s record high. Without the interest of more seasoned investors, LTC might not appeal to new market entrants. The altcoin also discouraged miners because, as LTC’s capitalization declined, mining became significantly less profitable. In the event of a correction trend, LTC’s price downside target comes to be at about $47, down roughly 50% from current price levels. This bearish bias will be confirmed if the $63 support level is broken down below.