After a few weeks of quiet, Litecoin (LTC) has resumed its lengthy fall, once again breaking through the $7 mark to $6.97 minutes ago. Litecoin has not visited such levels since just over 3 weeks ago, when it briefly touched $6.66. At the time, it fell as low as $2.21 during a period of flash selling.
Litecoin recovered to as high as $9 one week later, but that was as far as it would stretch. From its peak, LTC first declined gradually, but more recently, the drops came in 5-10% spurts.
The earlier predictions of LTC/BTC reaching 0.01 by August are no longer a fantasy. The pair is currently trading at 0.0124, breaking an earlier 0.0125 support level held for three weeks.
No particularly deleterious developments appear to have popped up for Litecoin. It appears that the market is continuing to gradually lose faith in the coin amid its getting lost amongst the hundreds of other altcoins now out there. Charles Lee’s warnings about the threats facing Litecoin and Dogecoin may now be catching up with traders.
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Is there a way I profit off of the fall?
Bitfinex appears to allow the shorting of litecoins with a margin account.
Another option may be Plus500, which offers a CFD for Litecoin. As with all its CFDs, short positions can be taken. The catch: the current buy/sell spread on Litecoin is a whopping $0.39, or 5.5%. This may be a remnant from the days when Litecoin traded at $20-30, at which time spread would have been only $1.5-2%.
Even if you to take a long-term view of major losses in excess of 5.5%, all contracts expire daily. While struggling, Litecoin isn’t dropping by such large amounts frequently enough. The odds of profiting off this contract are virtually nil. Plus500 would be exposing itself to huge risk if it wouldn’t expire contracts daily, unless they have an ample resource to hedge short positions taken against them.
Avatrade’s spread is 5%, but it does offer an option for a weekly contract.
(Update: Was there a short squeeze? LTC just spiked to $7.58, a gain of nearly 9% within an hour.)