Litecoin (LTC/USD) is following in Bitcoin’s footsteps to recovery- sort of.
After bottoming out at $3.33, Litecoin proceeded on a rally that culminated in its gaining 86% to a peak of $6.19 5 days ago. Since then, it’s been a roller-coaster ride. From the peak, it fell all the way back to $4.67 in 48h, a loss of nearly 25%. From there, the general trend has been upward, two steps forward, one step back.
Unlike Bitcoin’s recovery, which has taken a fairly smooth, gradual form, Litecoin’s has been choppy. Upswings have been on the scale of 10% within 1-2h, with retracements of about 50%. Minutes ago, the price suddenly dropped by 6% within an hour, the coin now trading at $5.54 on BTC-e.
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Indeed, Litecoin recoveries have been superficial during its 7-month long descent. During Bitcoin’s May rally, in essence a recovery from its April sell-off, Litecoin stagnated. Its most recent foray below $7 came after its earlier recovery to $9 gradually lost steam over several weeks and its bleeding back to previous lows.
Currently, it is trading at a 21% discount to its 50-day moving average, now down to $6.91. Versus Bitcoin, which has been stable, it has slipped back to 0.0107.
There is some reasonable short-term support in the $5.10-5.30 range. Should this be broken, look for history to repeat itself and new lows established 4-6 weeks from now.