Litecoin threatened the $60 level on Wednesday as it looks like we are ready to break down again. There is quite a bit of support underneath that shows signs of life, based upon the previous hammer, but it certainly looks as if we are going to fall and test that level again. Because of this, I think we have a situation where the market will eventually try to slice through all of that area.
If it does, that opens up a move to at least $40, perhaps even down to the $30 level. Frankly, there’s nothing from a technical analysis standpoint that even remotely suggests that Litecoin should be trusted for purchase, and I think we have much further to go to the downside. This is probably easy to say for most crypto coins, not just Litecoin, so it’s not necessarily going to be an indictment on the Litecoin ecosystem, rather than an indictment on crypto in general. Because of this, I look at any rally as a shorting opportunity and do so on offshore exchanges that allow leverage.
It’s not until we break above the $80 level at the very least that you could say that momentum is picking up because you would then see the 50-day EMA broken. Even then, I think you will struggle to get above $100, if for no other reason than the psychology behind it. I believe Litecoin is going to follow the rest of the crypto down quite a bit from here because even though most crypto has dropped at least 60 or 70%, it can drop another 50% from these low levels. Crypto winter is here for a lot of the smaller markets, and now they need to see Bitcoin save the whole situation, or things could get rather ugly.
While I don’t necessarily think Litecoin is going to zero, there will be several coins out there that do. We are about to see a wipeout in the crypto markets because the speculation got so out of control. Most of these crypto markets are based upon something that could possibly happen down the road, but certainly is not happening right now. Sooner or later, people will come to realize that only a couple of these can survive, due to the fact that so many of them are trying to accomplish the same thing.
