Litecoin price weekly analysis 21 June: Price slide seems over as market consolidates
Litecoin has held steady for the week despite the launch of futures trading.
- The large price dips of the last couple of weeks seem to be arrested.
- Litecoin's price seems stuck between $95 and $100.
- Litecoin futures trading fails to spark the market.
Like much of the market, while Litecoin hasn't yet started recovering from the large losses of the past fortnight, the rapid declines seem to be arrested – for now.
Although LTC has lost a little over 3% over the past seven days, to sit at US$96.72 at the moment, it has spent most of the last three days trading in a relatively narrow band between $95.00 and $100.00. The challenge of the last week has been holding above $100, which seems to be a strong barrier at the moment.Trading volumes seem to be tracking with the price closely. As volumes dip – $240 million 24-hour trading volume seems to be around the magic level – the price falls and then the buyers come out, pushing volumes to as high as $312 million. Then volumes dip as the buyers go back into hiding as the price goes up.
That suggests there are some short term trades going on or the HODLers are coming out and trying to pick off Litecoin when the price is at its lowest, in the hope of perhaps taking a long term position.
While the situation for much of the market, including Litecoin, looks pretty grim at the moment with the price down 50% on its peak earlier this year, the good news for longer-term players is that it's up 120% on a year ago.
Last week, UK-based cryptocurrency futures trading platform Crypto Facilities launched trading of Litecoin-based futures. Timo Schlaefer CEO of Crypto Facilities said, "We believe our LTC-dollar futures contracts will increase price transparency, liquidity and efficiency in the cryptocurrency markets."
That hasn't happened yet.
News of the Bithumb hack may have caused some disquiet among traders but Litecoin founder Charlie Lee's comments to CNBC summarise the situation well. He said, “It’s like if a bank gets broken in and gold gets stolen, does this affect the price of gold? It shouldn’t. Same with Bitcoin. If the exchange doesn’t protect their coin well enough and gets hacked, it doesn’t really change the fundamentals of the coin that they’re protecting."
What was most critical in understanding what happened in the Bithumb hack is that none of the blockchains of the stolen coins were affected. The problem was with the exchange's security and not the cryptocurrency technology.
But I wonder if the subdued nature of the traders this week, as evidenced by Litecoin's relatively quiet trading week, is symptomatic of increased caution as cryptocurrency exchanges come under tighter scrutiny.
Disclosure: At the time of writing, the author holds BTC, EOS, ETH, XLM, ETN, LTC, ADA and XRP.
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