Despite Bullish Factors, Litecoin Suffers Brutal Rejection At Downtrend Resistance
Litecoin was one of this week’s biggest movers and shakers in crypto, beating even Bitcoin substantially. The bullish impulse took the altcoin to a year-long downtrend line against BTC but unfortunately was rejected hard.
With the general consensus being that Litecoin often leads the way for altcoin trends, a further fall against Bitcoin – as analysts have been predicting – could be coming.
Litecoin Lights Up Green As The Cheapest Crypto Coin On PayPal
Litecoin was left behind this summer’s altcoin season, while Ethereum and DeFi soaked up all of the capital. When that trend ended, the tides turned to Bitcoin. But now, it could finally be Litecoin’s turn.
Although the altcoin referred to as digital silver has had a lackluster 2020, it could end up being the cryptocurrency that most benefits from the biggest news of the year.
No news has even come close to PayPal supporting cryptocurrencies and offering them to the company’s 350 million users. It was the “shot heard ’round the world on Wall Street,” according to crypto bull Mike Novogratz.
It was also the catalyst that potentially triggered a new bull market for Bitcoin. Only four cryptocurrencies are offered by PayPal currently: Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.
Litecoin was rejected at the downtrend line against BTC | Source: LTCUSD on TradingView.com
Litecoin, being the cheapest of the bunch and still sporting a scarce supply, has responded with an explosive more than 25% move this week alone.
The daily chart above shows a clear breakout of Litecoin’s downtrend line against the dollar. However, against Bitcoin, things aren’t faring as well.
Litecoin was rejected at the downtrend line against BTC | Source: LTCBTC on TradingView.com
Are Altcoins Ready To Collapse Further Against Bitcoin?
In the chart above, Litecoin was rejected for a fourth time from a downtrend line stemming from the 2019 altcoin peak. During the time, Litecoin had kick started the year off with a bang due to its block reward halving. The asset reached a 500% return before a massive crash. Bitcoin made a run for $13,800 leaving alts behind, beginning the downtrend on the LTCBTC pair.
An “altpocalypse” ensued, setting even deeper lows on each coin’s BTC ratio.
Litecoin’s weakness on the BTC pair could suggest that there is still one more large fall left for altcoins against Bitcoin.
While Bitcoin makes a run to its former all-time high, altcoins could fall victim to BTC bullishness once again like they did last year.
The path to the next altcoin season arrives after Bitcoin sets a new record | Source: CRYPTOCAP-BTC.D on TradingView.com
BTC dominance is also breaking up out of a broadening wedge pattern. The target is similar to the previous structure’s measured move, which would take the metric back to 83%, absolutely obliterating altcoins in the process.
Alts could continue to get dragged up in USD value due to Bitcoin’s bull run, each altcoin’s ratio could have one more drop to sweep current lows.
Related Reading | Here’s Why Crypto Analysts Are Divided Over The Future Of Altcoins
The one saving grace for Litecoin could be the fact that the recent altcoin season skipped over it entirely. “Paleo-alts” is a term recently coined referring to a class of older altcoins that have been since forgotten about for shiny new DeFi tokens. XRP is another, for example.
Litecoin was rejected at the downtrend line against BTC | Source: LTCBTC on TradingView.com
The two laggards along with other archaic by crypto standards alts could still do well while Bitcoin crushed the rest of the space.
When LTC does breakout against the leading cryptocurrency, it rises adnywhere from 150 to 450% on the ratio.
With Bitcoin getting more expensive by the day and out of the reach of retail investors, and Litecoin acting as the most cost-effective way to own full coins on PayPal. the downtrend line that is currently holding LTC back might not do so much longer.
Featured image from Deposit Photos, Charts from TradingView.com
OhNoCrypto
via https://www.ohnocrypto.com
Tony Spilotro, @KhareemSudlow
