Litecoin (LTC/USD) bounced back above $3.00 on BTC-e this weekend after a correction of more than 15% sent it to as low as $2.60.
Last week, litecoin capped its biggest rally since late January, gaining over 120% in less than a month. The gains were concurrent with those in bitcoin and other cryptocurrencies, whose advances were relatively minor.
Litecoin is down by roughly 95% since peaking in late 2013, so price swings of such scale are in order, even after mirroring bitcoin’s recent stability for the better part of two months.
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While it is entirely possible that litecoin will extend its rally in the short-term, there appears to be no fundamental cause for the sharp rise. It is plausible that once the rise reached an initial critical mass, subsequent activity was dominated by speculators looking to pile in. A similar spike in late January was followed by a return to the $1.80’s, and it is likely that a similar correction will ensue during the coming weeks.
Litecoin has noticeably run into resistance near $3.10, beyond which its momentum, and that of the broader crypto markets, have failed to propel it further.
The recent moves have revived litecoin’s traditional amplification of bitcoin’s USD-based movements, although on a highly exaggerated scale, theoretically rendering them less sustainable.