Litecoin News Update
Wednesday morning presents a doomsday-like situation, as the cryptocurrency market sees a wide correction. We’re scrolling down the list of the top 40 cryptocurrencies and nearly all of them are drenched in crimson. Litecoin is likewise a victim.
We’re on the third day of this so-called market correction now and many have begun to lose their cool. What the heck is going on? Why is everyone selling?
If you’re aboard the LTC ship and are fearing it will go down, then here’s something you must know before you decide to jump ship.
Two events have occurred side-by-side to trigger this sell-off. Let’s start from the beginning.
First, last week, three of the biggest global cryptocurrency exchanges—Binance, Bittrex, and Bitfinex—all temporarily disabled new user sign-ups.
Many looking to make an overnight killing were turning toward cryptocurrency exchanges to buy their “get rich quick” cryptocoins. With too many new registrations coming in, the exchanges could no longer handle the high volume. Here’s one tweet from Binance.
Other exchanges like Kraken and Poloniex likewise warned of long wait times for account verifications of new users.
In short, these exchanges basically set up roadblocks for new buyers.
To add fuel to the fire, two days ago, everyone’s go-to website for crypto-rankings—CoinMarketCap—removed two major South Korean exchanges from its average price calculations. Things went topsy-turvy at this point.
The two exchanges—Bithumb and Coinone—are amongst the country’s biggest exchanges that drive significant trading volumes in cryptocurrencies. Nearly all cryptocurrencies, including Litecoin, are trading at a much higher premium on these exchanges than elsewhere.
For instance, the average LTC to USD rate at the time of writing was $240.86, while the Litecoin price on Bithumb and Coinone was ranging between $336.00 to $337.00. That’s a huge disparity.
So, when CoinMarketCap removed these exchanges from the equation, the average prices gave the impression of tanking.
Here’s how CoinMarketCap justified the move.
This sent investors into a tizzy. Investors began to unwind their positions in an effort to cut losses.
So, on one end, we saw sellers leaving in droves, and on the other end, new buyers were blocked from entering.
The rest is basic economic theory. With too many sellers and not enough buyers, prices headed south.
So in a nutshell, the drop in cryptocurrency prices has little to do with their fundamentals, Litecoin included. This is just a market anomaly which may correct itself soon.
We have no reason to alter our Litecoin price prediction for 2018 in response to this temporary market aberration. We continue to root for Litecoin with an LTC price target of $400.00.