I feel that there’s no compelling reason to be a buyer at this point.
Litecoin pulled back ever so slightly on Tuesday as we try to figure out whether or not there is any real hope for the crypto markets turning around. We did have a decent Monday, but it should be noticed that it was Memorial Day in the United States, so a lot of the American institutional traders were not trading.
It’s also worth noting that there is a lot of noise just above as we had been going sideways for a couple of weeks, broke down below that level, and now are retesting that same area. In other words, we may see more sellers jump back into the market. It looks to me as if the 50-day EMA above will continue to cause downward pressure as well, which currently sits near the $83 level.
If we do break down, it’s very likely that Litecoin will go looking to reach the $50 level, and then maybe even the $40 level after that. This is a market that has been in a downtrend for quite some time, and it’s worth noting that the spread between the 50-day EMA and the 200-day EMA is almost perfect as far as a picture of a sustainable downtrend is concerned.
It’s very likely the crypto is about to see a lot of coins disappear because most of them have no real use case scenario. I personally have used Litecoin, and I like it a lot. However, adoption is a major problem and I think we are getting close to a situation where we will probably see half of these coins disappear, if not more than that. This is the natural cycle of things when it comes to technology, as we had seen in 1999 when so many of the hot tech stocks disappeared.
In an environment where risk appetite is scarce, it’s difficult to imagine that a lot of major institutional players are going to throw a ton of money at Litecoin. However, it’s very likely that it will survive, but I think that we have a rough couple of months at the very least ahead of us, so I feel that there’s no compelling reason to be a buyer at this point. In fact, what I would like to see is a lot of sideways and quiet action where people get used to whatever price we are trading at.