In the midst of a crypto market bubble, the price of Litecoin has surpassed $400.
On Monday, Litecoin (LTC) burst above the $400 barrier, hitting a new all-time high of $414 on Bitstamp.
The issue with purchasing Litecoin is that it has grown prohibitively costly in a short time. The tenth-largest cryptocurrency by market size surged 215% in the first three months of the year, from $124.42 to $413.90.
Year-to-date, it outpaced traditional markets, and many independent analysts now predict it to surpass $500.
Cycles of Trading
Following a wide upward surge in the cryptocurrency sector, the Litecoin market saw eye-popping profits. Several top altcoins outpaced the silver cryptocurrency, notably Dogecoin (DOGE), which gained over 17,000 percent YTD at one point.
The DOGE/USD exchange rates fell by 12 percent over the same period that the LTC/USD exchange rates increased by 12 percent, said Jason Lau, COO of San Francisco-based Okcoin, a crypto service provider.
Also on Monday, the Litecoin Dominance Index jumped from 0.96 percent to 1.11 percent, indicating Litecoin’s relative strength. This shows a nostalgic shift toward the Litecoin markets as other alternative cryptocurrency rallies begins to wane.
However, overvaluation concerns have caused recent price drops of up to 33% for Dogecoin. The Relative Strength Index (RSI), a conventional momentum oscillator indicator, is at the center of this negative analysis. The story of Litecoin is now the same.
Litecoin: Unreasonably High?
When the RSI peaks, the price of Litecoin frequently tests the 20-day exponential moving average (green wave) as temporary support. In the event of a lengthy sell-off, traders should target the 50-day simple moving average (blue wave).
When the RSI peaks out, a short-term trend reversal in the Litecoin market usually leads to the price testing the 20-day exponential moving average (the green wave) as a temporary support. Meanwhile, traders should take the 50-day simple moving average (the blue wave) as the major downside target in the event of a prolonged sell-off.
As a result, based on current moving average values. A hypothetical retracement after the recent spectacular gain might push LTC/USD to $252–$310.
Aside from technical, macroeconomic drivers continue to bolster cryptocurrency markets in general.
More than half of Millennials and Generation Z investors prefer cryptocurrencies over traditional equities, according to Charles Schwab. As a result of the global coronavirus pandemic, central banks worldwide have begun to loosen monetary policies, increasing their interest in the emerging digital asset business.
For example, the US Federal Reserve has declared that it will keep its monthly $120-billion asset purchase program and keep benchmark rates around zero until at least 2023. As a result, owning traditional safe havens like bonds and dollars has become cheaper.
According to Cryptowatch statistics, the correlation between Bitcoin (BTC) and Litecoin (LTC) is approximately 0.40.