An upside move in the litecoin market is struggling to gather pace amid low volumes.
At press time, the litecoin-US dollar (LTC/USD) exchange rate is $56 across global exchanges. As per CoinMarketCap, the cryptocurrency has gained 2.34 percent in the last 24 hours. Week-on-week, LTC is down 6.69 percent, while on a monthly basis, it’s up 5.13 percent.
But while perhaps those moves might not qualify as volatile in the cryptocurrency market, it appears litecoin is benefiting from a rotation of funds from bitcoin. A larger trend this week following the launch of bitcoin gold (BTG) trading on exchanges, the move is thus far keeping litecoin prices above the 100-day moving average.
Still, a move to $60 looks unlikely – and anemic trading volumes could be the reason.
Litecoin volume chart
The above chart shows:
- Daily volumes have dropped below 200 million, which is well below the average since April (400 million).
The odds are high litecoin falls below 100-day support as volumes remain weak, furthermore, fiat money is again being rotated into bitcoin. Hence, it will be difficult for alternative coins to hold their own.
The price action analysis also tilts slightly in favor of the bears.
Daily chart
The above chart shows:
- Expanding channel
- Money flow index (MFI) is losing altitude
- Prices trapped between the 50-day MA ($56.58) and 100-day MA ($53.95).
The MFI is a momentum oscillator that can be used to confirm the price action, and a decline in the metric shows a lack of buying pressure despite strong 100-day MA support.
Thus, odds are high that prices could drop to $51.50 (channel support). A violation there would open doors for a sell-off to $45.18 (Sep. 21 low). On the higher side, a move above $60.00 would add credence to the rebound from 100-day MA support and put a Oct. 15 high of $69.59 back in play.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.