Litecoin News Update
On Thursday morning, Bitcoin was the only cryptocurrency in the top 10 with green numbers flashing beside its name. All the others were drenched in red, Litecoin included.
LTC prices depreciated 5.14% against the U.S. dollar, bringing the Litecoin to USD exchange rate down to $96.52.
At first glance, this looks like a routine fall, given that cryptos often move by double digits in a single day. But you have to place this price movement in a larger context.
Every crypto in the top 10 depreciated over the last 24 hours. Meanwhile, Bitcoin advanced 18%, putting its price above $15,000 for the first time. And, at the same time, the cryptocurrency market capitalization rose by 7.7%, ruling out the idea that money was fleeing the market.
The only plausible explanation is that money rotated from altcoins to Bitcoin.
We can confirm this suspicion quite easily by checking the BTC Dominance metric, which shows Bitcoin’s market share relative to the entire cryptocurrency market cap. It moved from 57.08% to 63.20% in under 24 hours.
Why did this rotation begin, though?
The CBOE’s imminent addition of Bitcoin futures comes to mind as the obvious explanation. (Source: “CBOE to Begin Bitcoin Futures Trading December 10,” CoinDesk, December 4, 2017.)
After all, BTC prices jumped into action upon news of the December 10 initiation, whereby Wall Street traders will finally get their hands on Bitcoin futures. And it’s only natural that after the preliminary movement from that news, trend followers would have hopped on the bandwagon.
Daily Litecoin Chart
The end result is higher Bitcoin prices, albeit at the expense of altcoins like Litecoin.
However, if rumors about an epic short on Bitcoin futures are true, we could see this position unwind after December 10. The correlation between futures and spot prices are tenuous, but it’s safe to say that investor confidence is stretched pretty thin at the moment.
It’s not difficult to imagine a scenario in which BTC plummets because short-sellers are scoring big on its derivatives contract. That scenario would likely end well for Litecoin.
In any case, these short-term fluctuations smooth out over time. We still maintain our Litecoin price forecast for 2018, which predicts the currency breaking above $200.00.