On Friday, capital outflows from cryptocurrencies put Litecoin prices under pressure, yet LTC refused to break below $60.00, or even $61.00, for that matter. This may change, of course, but it was heartening to see some resiliency in Litecoin.
That’s why investors shouldn’t worry too much about the Litecoin to USD exchange rate falling 2.12%. It isn’t good Litecoin news, but that doesn’t mean investors should break out the Kleenex. There’s a silver lining here—the Litecoin to Bitcoin rate appreciated 3.1%.
While this may not seem like much now, try to remember what the last two weeks have looked like. On one hand, BTC was experiencing a rocket ride to the moon, and on the other, LTC was languishing in the mid-$50s.
At the time, we predicted a reverse-rotation of funds, from Bitcoin to altcoins. It turns out we were right. Altcoins recorded significant gains on Wednesday and Thursday. While that progress was cut short on Friday morning, it’s an undeniably positive sign.
Perhaps now we can have a return to sanity.
Markets have been utterly nonsensical in the last two weeks. First, there was the obsession over SegWit2x, a proposed upgrade to Bitcoin that threatened to divide the Bitcoin community into warring factions. It would almost certainly have split the blockchain.
Luckily, the developers behind SegWit2x came to their senses. Rather than force a standoff that they were sure to lose, they decided to call off the upgrade and live to fight another day.
Second, there was CME Group Inc (NASDAQ:CME) deciding to add a Bitcoin futures contract. This piece of news started a rabid bullish run that lifted Bitcoin prices to record highs.
However, investors were ignoring the obvious fact that CME doesn’t have the final say about what derivatives are listed—the Commodities Futures Trading Commission does. Unless the contract passes regulatory muster, it is dead in the water.
I still think that CME will get its way, which would likely inspire a repeat rally into BTC. But that doesn’t matter quite so much as the return to sanity. LTC prices were suffering under the winner-takes-all dynamics of recent weeks. Some semblance of normalcy could help the currency retake the $90.00 level, and then ultimately reach our $200.00 Litecoin price forecast.