Hi friends! Welcome to this update analysis on Litecoin. Let's jump right in. looking at the four hour chart, you can see that I've changed the flag portion of the bull flag. The way that I had it drawn yesterday, produced a breakout, but the breakout rolled over just above the Inv. H&S Target. That rollover is not what you want to see on a breakout. Now, we have to assume that the flag has morphed into a different structure, which is now shown on the chart. The 20 EMA (in blue) is rising into the flag, so it could be the support that ultimately causes a breakout. If LTC starts to break below the 20 EMA, that would be a yellow caution flag. For educational purposes only, if it breaks below the bottom of the bull flag, that would be an obvious short term sell signal. The MACD is rolling over slightly, in conjunction with the price action. For now, keep a close eye on the action inside of the bull flag, to determine where we go from here. On the upside, initial resistance should be found at the top of the uptrend channel (in pink.) Keep in mind that the hard fork is supposed to occur tomorrow, on the 1,371,111th block, at approximately 20:56:44 (UTC). We may not see a move out of the flag, up or down, until then. According to the big bull flag on the chart, we are likely to get a breakout to the upside. However, we should never place trades until we see evidence of a breakout.
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***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
Given that this huge volume and subsequent price increase has largely been driven by the "hard fork" you should consider some basic considerations for valuing the "hard fork."
If we ignore whatever TA might tell us about price movement, we can say roughly that the price move between $180 and $225 could be attributed to the hard fork speculation. This means the market is pricing Litecoin Cash at roughly $4.50 / coin. ($45 price move divided by 10 coins per LTC) or about 2% of LTC price. And this is without any exchanges picking it up to be traded and very little communication/publicity from developers/community regarding this coin. So this strongly suggests a highly speculative price action that likely involves a lot of weak hands that aren't going to want to "overpay" for their gamble on some Litecoin Cash "free lunch."
Given that this coin will be completely illiquid until exchanges pick it up there will likely be extreme volatility with Litecoin Cash price until market forces stabilize. These market forces will be 1) miner adoption 2) other utility aspects positive or negative 3) to what extent will whales support this coin or try to manipulate its price 4) overall liquidity / network utilization
Give this volatility it would seem reasonable that many observers will simply try to buy Litecoin Cash at a cheaper price than what the market is valuing it at instead of going through the process of obtaining it by buying Litecoin and risking a loss holding it past Feb. 18 as speculators exit all at once. While it may be entirely possible that Litecoin magically came up with a bunch of new users overnight I think that would require magical thinking to win out over rational thinking. A bunch of people are clearly speculating on this Litecoin fork and some have exited their positions with profit (i.e. the equivalent of selling your Litecoin Cash) rather than take the risk of holding the bag after Feb. 18.
From the Bitcoin Cash hard fork we know that 1) Bitcoin prices went up in an upward trending channel 2) Bitcoin Cash price fell around 70% in the days after exchanges started trading it. 3) Bitcoin Cash eventually became heavily supported by whales and a developer community to influence the price in a positive manner
From what I've gathered Litecoin Cash is being driven largely by miners that want to use their old SHA256 ASICs. However, given that Litecoin Cash has no website and almost no search presence I don't see this project taking off due to a lack of community support.
Even Bitcoin Gold, which was largely perceived as a shitcoin, has done a great deal to legitimize themselves while seeing a steady loss of trading volume, price, and likely miners. So far, any search of "Litecoin Cash" will only turn up a few news articles and nothing else.
Given the circumstances of this hard fork I can see better opportunities for "buying" or "mining" Litecoin Cash, especially if it will be as illiquid as it initially appears, and Litecoin prices could see a dip following the hard fork given the speculative nature of the buying activity.
cryptoexcedrine
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@powderpc, great perspective, thanks for taking the time to post this.
@arturorz17, just to point this out, there is another Litecoin Cash at litecoincash.io that claims to be on two exchanges and also has a twitter handle going by Litecoin Cash (don't remember what it is) and appears to be a smaller project than the 'new' Litecoin Cash. This initial confusion could be problematic as neither coin is prominent in search results. It will help if one of these two identically named projects changes their name or merges. Judging from their site content and interviews the 'new' Litecoin Cash doesn't come across as a scam so it might succeed since they seem to have put some thought into their niche, but that might not be positive for LTC prices. Also, this should really bring a lot of negative litigious concepts into play as many coins will likely be looking to trademark their names to avoid the rampant 'knock-offs' that are trying to capitalize on an existing coin's brand like bch, btg, lcc, monero V, etc.
It makes sense from a risk perspective that someone buying LTC to get "free" LCC would sell off most of any position they bought for the LCC (assuming they may also have a longer term position they don't need to touch) to take profit and lock in the riskless nature of the trade rather than sell the LCC and buy more LTC. From a logical perspective your holding of LCC has little to no risk if you sell off enough LTC to lock in your profit on the LTC gain rather than sell your LCC and buy more LTC which would increase your risk. If you don't "take" profit then your "paper" profit means nothing. I can see those who already owned LTC selling off LCC and reinvesting it in something else but if they're already holding a portfolio of coins they're probably in no rush to get rid of a new coin that could have much higher growth potential than the rest of their portfolio.
Since the LCC coin doesn't force miners to choose between LTC and LCC and the big coin emissions difference makes them fundamentally different in their utility I wouldn't commit to saying LCC is all that bad for LTC in the long run if Litecoin continues to function better than Bitcoin.
Nanoid
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@powderpc, That review kinda confirmed my fears. We saw quite a lot of people sell their Bitcoins after Bitcoin Cash fork which caused the price to fall. I think we will see that happen again. Obviously, there's a different factor to consider as well... The all mighty Litepay is going to be launched at 26th of Feb, so some people might want to hold LTC in the hope of upwards price surge. I've sold my LTC for now, and will put a stop order above MPC-s bull flag target, that way I can sleep tonight.
craigsa
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@powderpc, thanks for the great input. Just wanted to clarify that they do have a website - litecoinca.sh/
Boss_Coyote
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LTC was extremely undervalued to beginning with don't think the fork is the catalyst here but rather the only coin of the top five actively making moves towards adoption on a regular basis .. the protential of a legitimate fork of BTC holding up against everyday usage is what is driving the price .. adoption is closer then we think and LTC is leading the way... i wouldn't be surprised to see a flip with BCHs market cap before end of year
If we ignore whatever TA might tell us about price movement, we can say roughly that the price move between $180 and $225 could be attributed to the hard fork speculation. This means the market is pricing Litecoin Cash at roughly $4.50 / coin. ($45 price move divided by 10 coins per LTC) or about 2% of LTC price. And this is without any exchanges picking it up to be traded and very little communication/publicity from developers/community regarding this coin. So this strongly suggests a highly speculative price action that likely involves a lot of weak hands that aren't going to want to "overpay" for their gamble on some Litecoin Cash "free lunch."
Given that this coin will be completely illiquid until exchanges pick it up there will likely be extreme volatility with Litecoin Cash price until market forces stabilize. These market forces will be 1) miner adoption 2) other utility aspects positive or negative 3) to what extent will whales support this coin or try to manipulate its price 4) overall liquidity / network utilization
Give this volatility it would seem reasonable that many observers will simply try to buy Litecoin Cash at a cheaper price than what the market is valuing it at instead of going through the process of obtaining it by buying Litecoin and risking a loss holding it past Feb. 18 as speculators exit all at once. While it may be entirely possible that Litecoin magically came up with a bunch of new users overnight I think that would require magical thinking to win out over rational thinking. A bunch of people are clearly speculating on this Litecoin fork and some have exited their positions with profit (i.e. the equivalent of selling your Litecoin Cash) rather than take the risk of holding the bag after Feb. 18.
From the Bitcoin Cash hard fork we know that 1) Bitcoin prices went up in an upward trending channel 2) Bitcoin Cash price fell around 70% in the days after exchanges started trading it. 3) Bitcoin Cash eventually became heavily supported by whales and a developer community to influence the price in a positive manner
From what I've gathered Litecoin Cash is being driven largely by miners that want to use their old SHA256 ASICs. However, given that Litecoin Cash has no website and almost no search presence I don't see this project taking off due to a lack of community support.
Even Bitcoin Gold, which was largely perceived as a shitcoin, has done a great deal to legitimize themselves while seeing a steady loss of trading volume, price, and likely miners. So far, any search of "Litecoin Cash" will only turn up a few news articles and nothing else.
Given the circumstances of this hard fork I can see better opportunities for "buying" or "mining" Litecoin Cash, especially if it will be as illiquid as it initially appears, and Litecoin prices could see a dip following the hard fork given the speculative nature of the buying activity.