While ups and downs are part of a cryptocurrency’s trajectory, the broader momentum is usually poised to be positive, albeit a market crash takes place. But that is not the case with Litecoin.
Litecoin is not going up…
The altcoin’s fixed trajectory is downwards as ever since it marked its ATH in May, the coin was stuck within the downtrend wedge, failing escape attempts.
And as of yesterday, it not only fell through it, LTC also fell through the $100 mark, displaying no signs of recovery.
The cause of this development was the 8.88% decline in price noticed on 5 May, which occurred despite positive developments taking place the day before.
Litecoin price action | Source: TradingView – AMBCrypto
Earlier this week, Gucci announced that it was opening its doors to crypto payments and was accepting ten cryptocurrencies, including Litecoin.
But the extreme fear persisting in the broader market did not let Litecoin capitalize on this announcement to initiate recovery and ultimately ended up dropping.
Currently down by 9.63%, LTC is trading at $96.1, which is only going to disappoint its already dejected investors further.
Crypto Fear and Greed Index | Source: Alternative
With over 4.28 million investors facing losses, it is easy to create panic in the market. Besides this is the most that Litecoin holders have suffered due to a lack of profit for over 26 months now since March 2020.
Litecoin investors in losses | Source: Intotheblock – AMBCrypto
Consequently, investors have been keeping the use of their Litecoin limited, which was kind of visible in the declining velocity of the network. LTC isn’t changing hands quite as much as it was back in March, leaving transactions in a day at just $1.53 billion.
Litecoin velocity | Source: Santiment – AMBCrypto
Given such a huge announcement failed to trigger a positive response from Litecoin, the altcoin can be saved only by its king, Bitcoin.
Although, after falling by 7%, the day before yesterday, Bitcoin fell to trade at $36k, it is the only coin that can reinvigorate a rally in Litecoin since the coin is known to follow BTC’s trajectory.
Sharing a high correlation of 0.96 with Bitcoin, Litecoin investors might want to keep an eye on the Bitcoin chart now instead of LTC since once the former goes up, it will take the latter along with it too.
Litecoin’s correlation with Bitcoin | Source: Intotheblock – AMBCrypto