Litecoin (LTC/USD) has bounced back as high as $1.36 on BTC-e after hitting $1.06 12 hours ago. It is currently trading at $1.27, its next moves uncertain in an unstable market.
While it technically did gain as much as 28%, dead cat bounces of such scales are to be expected after losing over half of its value in the span of a few days. Since shooting up to $48 in late November 2013, litecoin has lost 98% of its value.
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Its heaviest volume came yesterday when it made its first major moves to below $1.50. At one point, over 150,000 LTC ($200,000) were crossing hands per hour. It was LTC’s heaviest activity since the August sell-off (it is, in fact, higher in litecoin terms, but lower in dollar terms). During the second stage of its drop, which saw it fall to $1.06, volume was much lower. Often, volumes peak at or near the critical point of reversal. Hence, there may still be some unspent selling pressure in the near-term.
The $1.06 mark was litecoin’s lowest level in nearly two years, exceeding a low of $1.11 hit in October 2013.
For those convinced that all hope is lost for Litecoin, there aren’t many options for shorting it. Plus500 has brought down its spread to 10 cents, but at current prices that’s 8%. The contract also expires daily, making it effectively impossible to break even.