Litecoin (LTC) has broken the $400 mark, reaching a new all-time high price of $414 on Bitstamp on Monday.
The issue with purchasing Litecoin is the fact that it’s become too expensive in a very little period. The planet’s 10th-largest cryptocurrency by market capitalization is worth 215% more than it was at the beginning of this year, soaring from $124.42 to a new record high of $413.90.
Its large rally has conquered traditional niches on a year-to-date timeframe, with many independent analysts now predicting the movement to expand toward $500.
Eye-popping returns in the Litecoin marketplace came on the heels of a broad upside movement in the cryptocurrency marketplace. The silver crypto’s top altcoin competitions, including Ether (ETH), XRP, Cardano (ADA) and lots of others, posted greater gains, together with Dogecoin (DOGE), a joke cryptocurrency, increasing by over 17,000percent YTD at the same point.
Jason Lau, chief operating officer of OKCoin — a San Francisco-based crypto service business — highlighted a brewing reverse correlation between Litecoin and Dogecoin, noting that the DOGE/USD exchange rates dropped by 12 percent in the period that saw the LTC/USD exchange rates popping higher by 12%.
So… are people rotating out of $DOGE (-12percent ) to $LTC (+18percent )?? https://t.co/DQmWqXu5fp pic.twitter.com/l3GH2cSbic
Meanwhile, the Litecoin Dominance Index, a metric that measures Litecoin’s strength against the rest of the cryptocurrency market, increased from 0.96percent on Sunday to as high as 1.11percent on Monday. That farther reflects a sentimental shift to the Litecoin markets along with other alternative cryptocurrency rallies show signs of cooling .
But Litecoin is currently grappling with the identical overvaluation dangers that brought Dogecoin’s price to crash by up to 33% in the preceding sessions. In the heart of this bearish analogy establishes a timeless momentum oscillator indicator, called the Relative Strength Index (RSI), that has predicted potential price reversals in global markets. It currently tells the exact same story about Litecoin.
The LTC/USD daily graph shows its RSI at an inflection level near 79.02. That is 9 points over the overbought brink, which has earlier led to price corrections.
Litecoin price’s response to higher RSI levels in recent history. Resource: LTCUSD on TradingView.com
Typically, a short-term trend reversal in the Litecoin marketplace — if its RSI shirts out — leads the price to check that the 20-day exponential moving average (the green tide ) as interim support. Meanwhile, an extended sell-off prompts dealers to treat the 50-day easy moving average (the blue tide ) acting as the primary downside target.
Thus, a potential pullback following the recent volatile move risks sending LTC/USD to $252–$310 based on present moving average valuations.
Regardless of technicals, the macroeconomic catalysts are still support cryptocurrency markets around the whole.
The United States Federal Reserve, for instance, has explained that it would last its $120-billion monthly asset purchase program while preserving benchmark rates near zero until 2023. That has reduced the opportunity costs of holding traditional safe havens like dollars and bonds one of regional investors.
Meanwhile, the correlation between BTC (BTC) and Litecoin stands near 0.40, based on data gathered from Cryptowatch.
