Despite China taking a bat to Litecoin’s knees, the Litecoin-to-USD exchange rate bounced up about 9.68% to roughly $51.89. “What explosive piece of Litecoin news caused this rally?” you ask.
Oddly, nothing in particular.
This was a see-saw moment for Litecoin prices. After tilting hard towards the bearish side last week, investors pushed off the bottom to bring LTC prices back above $50.00.
Perhaps they thought the reaction to China’s ban on cryptocurrency exchanges was a tad overblown. Or perhaps they thought LTC is a buy under $50.00.
In either case, the surge in prices is likely to continue now that the fog of uncertainty has lifted.
Last week, we knew nothing for certain.
Now, at least, we know that Chinese exchanges have to cease yuan-denominated trading by the end of October. We know that OKCoin and Huobi stopped taking yuan deposits almost immediately after their meeting with regulators. And we know that some crypto-to-crypto trading platform will exist after October.
This helps the entire market move forward.
For example, OKCoin and Huobi still account for 22% to 23% of Litecoin’s trading volume, meaning that investors are doing one of two things:
- Selling their remaining Litecoin into yuan so they can exit the market, or
- Converting all the yuan in their trading accounts into Litecoin so they can continue crypto-to-crypto trading in the future.
In other words, people are either exiting the market for good or are committing to it 100%.
In effect, China turned off the tap that brought money from fiat to crypto. But that doesn’t mean all the existing volume from China will vanish. Those people continue trading, which is why Litecoin prices stabilized over the weekend.
Going forward, the Litecoin price forecast is looking rosier than expected. It is already finding support from Korean exchanges like Bithumb, plus there is a lot of promise in its payments infrastructure. We remain bullish on LTC, especially when it trades below $70.00.