Rumors that China will close its cryptocurrency exchanges cast a shadow over the Litecoin price forecast on Tuesday. Except that this time, the rumors came from no less than The Wall Street Journal. (Source: “China plans to close the Bitcoin trading platform,” The Wall Street Journal, September 11, 2017.)
Naturally, LTC prices fell 9.68% against the U.S. dollar and 0.86% against Bitcoin over a 24-hour period. At the time of writing, Litecoin was trading at $59.64, far below its $91.00 high at the start of the month.
What’s interesting is that Litecoin and Bitcoin fell by virtually the same amount. This suggests that fear is running across the entire industry, superseding any bullish piece of Litecoin news.
More to the point, the report is finding a lot of traction in media circles because it comes on the heels of an actual Chinese crackdown on initial coin offerings.
According to The Wall Street Journal, regulators believe there is “too much disorder” in the cryptocurrency market. While there was no official word from Beijing, some believe the “disorder” argument is merely a cover for authorities desperate to maintain control of China’s economy.
However, it’s important to note that the article in question was based on anonymous sources.
A poll taken on September 8 showed that 83% crypto enthusiasts thought the China news was fake. However, if the losses yesterday are any indication, investors are starting to take the prospect of a China closure much more seriously.
If this story is true, Litecoin prices will suffer extraordinary losses.
Chinese exchanges and mining operations have been key to its success. In fact, OKCoin.cn and Huobi are the leading Litecoin exchanges more often than not, regularly accounting for 50% of the currency’s trading volume.
Until there is clarity on this issue, we expect further losses in Litecoin prices.