Litecoin (LTC/USD) soared to its highest levels since late September. It gained as much as 50% to $4.67 on BTC-e during the past 24 hours, making it by far the best performer among major cryptocurrencies.
24 hours ago, litecoin first pierced through its resistance level of $3.10, and then proceeded to hover near its recent high of $3.20. Once breached, traders rushed to partake in yet another rally reminiscent of the wild days of late 2013.
The spike was the largest 24 hour advance since litecoin began its climb in late May. The coin has roughly tripled in value from its $1.40-1.60 trading range held during the preceding two months.
As to possible causes for the rally, the earlier stages were likely fueled by a speculative frenzy, where traders simply jumped in anticipating other traders to push prices higher. While such rallies are essentially the inflation of a bubble surely destined to pop, they can fuel themselves to multifold returns within a short period. With the earlier resistance out of the way, we may therefore see further gains before any major correction materializes.
There appears to be no fundamental causes for the gains, other than a possible increase in demand for alternative cryptocurrencies due to concerns arising over Bitcoin’s block size limitations. Many have argued that under its current design, Bitcoin can’t graduate from its experimental phases toward mass adoption. Even so, altcoins like Litecoin can face similar hurdles.
There has been mention that the latest spike was motivated by short sellers rushing to cover their positions.
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A Bullish Market?
Today’s show has overshadowed that of bitcoin, which quietly gained as much as 6.3% to $268, its highest point since mid-February. Like during the preceding weeks, litecoin’s gains have vastly outpaced those of its progenitor- another indication of a speculative frenzy. The LTC/BTC rate jumped to 0.0168, its highest level in over a year.
Bitcoin is currently trading at $263, and litecoin at $4.23.
A number of other ‘traditional’ altcoins that have struggled over the past year have also mounted comebacks, reminiscent of their early days. Namecoin added another 30%, and now ranks 12th in market cap rank. Primecoin rose by 50%, bringing it back to 20th.
All cryptocurrencies, however, remain 75% to 90% off their dollar-denominated peaks reached in late 2013-early 2014.
Also worth noting is that in 2014, the June-July period was an upbeat one for bitcoin prices. But August’s volatility, whose effects lingered until year’s end, wiped out gains and sent prices to their lowest levels since prior to the November 2013 craze.