Source: PaxForex Premium Analytics Portal, Fundamental Insight
The cryptocurrency sector will follow equity markets lower, but a few assets appear to fight the downtrend amid positive fundamental developments. Litecoin managed to hold on to its bullish chart pattern despite the plunge in Bitcoin, Ethereum, and other Top20 cryptocurrencies. One reason is the decoupling of most well-established coins seeking to please regulators and maintain listings on cryptocurrency exchanges. Litecoin remained loyal to the original cryptocurrency framework of decentralized, anonymous financial transactions and implemented its MimbleWimble upgrade earlier this summer. It resulted in the delisting of Litecoin from numerous exchanges but attracted capital from core cryptocurrency believers, and price action outperformed many Top20 coins.
Litecoin implemented the upgrade on May 19th, and five South Korean cryptocurrency exchanges, UpbitBithumb, Coinone, Korbit, and Gopax, delisted Litecoin. They saw it as the easiest solution, but crypto compliance firm Elliptic announced it could help clients remain compliant with regulators and keep Litecoin listed by tracking usage of MimbleWimble, which Litecoin introduced as an optional feature. Most focus on the privacy features of MimbleWimble but ignore other improvements Litecoin introduced, like its cut-through feature that reduces needless transaction data from blocks and scalability improvements.
Cryptocurrency projects Beam and Grin announced plans to use MimbleWimble, which could see more next-generation projects implements its cutting-edge features beyond privacy. Other long-term bullish drivers for Litecoin are the Coinme announcement to allow Litecoin transactions from its 10,000+ cryptocurrency kiosks in grocery stores, and a potential boost from FinTech company Bitcoin Depot and its planned reverse merger with the SPAC GSR II Meteora Acquisition Corp valued at $885 million. Despite its name, it operates 7,000+ kiosks across 47 US states and supports Litecoin transactions, with more likely to come after the successful listing. While the cryptocurrency sector has more downside risk, Litecoin offers a beacon of strength, and any sell-off presents an excellent long-term buying opportunity.
The forecast for the LTC/USD remains cautiously bullish as this cryptocurrency pair attempts to hold its support area inside of its Ichimoku Kinko Hyo Cloud, which widened but shows signs of entering a sideways trend. Volatility could increase as bulls and bears fight for control over the next directional move. The Kijun-sen and the Tenkan-sen trend sideways, suggesting a choppy road ahead over the next few trading sessions. Traders should monitor the CCI after it recorded a higher low in extreme oversold territory, confirming the bullish trend in price action. A sustained breakout above -100 could trigger the next leg up for this cryptocurrency pair. Can bulls overpower bears and push the LTC/USD into its horizontal resistance area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000+ pips per month.
Should price action for the LTC/USD remain inside the or breakout above the 50.00 to 58.40 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 54.75
- Take Profit Zone: 73.40 – 81.25
- Stop Loss Level: 45.55
Should price action for the LTC/USD breakdown below 50.00, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 45.55
- Take Profit Zone: 24.80 – 29.90
- Stop Loss Level: 50.00
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