Litecoin in its Long-Term Bleak, Support Re-Test Imminent
Litecoin (LTC) has been the seventh-largest cryptocurrency in the market. And now, it has been consolidating within the range of $42 to $45 for a couple of weeks, with the altcoin recording sideways price action since. Even with some breakout attempts, LTC noted various rejections. Looking at the charts, it is suggesting that the bears might be here to stay.
Aside from that, a descending triangle pattern was forming on the daily chart of Litecoin. The completion of this pattern would possibly end up in a bearish breakout in the long-term. Also, the replacement of the daily moving averages supported this case. The 50 DMA highlighted a minor upswing that initially arose to decrease the gauge with the 200 DMA. With that, a bullish phase for the coin.
But the prospect of a golden cross became blurry as the two daily moving averages were moving parallel to each other. And this indicates a potential bearish phase might be ahead.
Then, more on the 200 DMA that hovered over the Litecoin price candles, the 50 DMA also moved up above candlesticks on May 13. At the same time, it further resisted an upward movement. So, this continues to validate the presence of the bears.
Putting the technical indicators into consideration, they found out that they too pointed towards a bearish phase. For example, the MACD, dropped below the signal line, suggesting the bears are taking charge. Then, the Relative Strength Index (RSI) was also under the 50-median neutral line. This pointed to a sentiment of sell pressure within the investors in the coin market.
BTC and LTC
Litecoin has been the silver to Bitcoin’s (BTC) gold. And this adage holds true as the two coins share the same codebase and exhibit generally similar price actions, rising and falling tandem.
Recently, the BTC-LTC correlation coefficient stood at a high of 0.86. And this was indicative of Bitcoin’s upward price movement’s ability to catapult Litecoin’s price to breach significant resistance points.
Grayscale Investments, a crypto fund manager, is accumulating Bitcoin at a rate equal to 150% of the new coins made by miners since the May 11 block reward halving.
Based on data published by independent crypto researcher Kevin Rooke, Grayscale has obtained 18,910 more BTC to its Bitcoin investment Trust since the halving. On the other hand, since May 11, there are only 12,337 Bitcoins mined.
Moreover, Binance CEO Changpeng Zhao reposted the chart and said, “There isn’t enough new supply yo go around even for just one guy.”
In the previous week, Rooke expected Grayscale to buy Bitcoin at a rate equivalent between 33% to 34% of new supply during the first quarter of 2020. And they have accumulated 60,762 BTC over 100 days.
In the said quarter, Grayscale also saw average weekly investment into its trust hits $29.9 million, comprising an 800% gain year-over-year.
Grayscale founder Barry Silbert did not hesitate to answer Rooke’s expectations. He tweeted, “Just wait until you see Q2.”
In the latest data of Rooke, Grayscale is now buying nearly double the number of coins per day on average. And this is with Rooke’s post-halving estimate equating to 1,112.35 BTC per day, up from 607.62 BTC in Q1.
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