The crypto markets are in full recovery mode, having regained nearly $25 billion between Tuesday morning and Wednesday night. It seems that investors have realized–as prominent trader WhalePanda noted yesterday–that China’s ICO ban has a direct effect on very few crypto projects.
One cryptocurrency that took a beating during the downturn was litecoin. Heading into the weekend, litecoin was in lock-step with bitcoin’s record rally. As bitcoin climbed toward $5,000, the litecoin price crossed milestone after milestone, eventually extending as high as $92 on September 2.
Since litecoin’s climb had been so quick–it had gained nearly 50% in a week–it fell rapidly during the sell-off. By September 5 at 2:00 UTC, the litecoin price had dropped to $59.
At that point, it reversed course and began to climb. Over the next 24 hours, the litecoin price rose 25% to $75. The rally continued on September 6, enabling the litecoin price to once again break past $80 at about 23:45 UTC. At the time of writing litecoin continued to trade at $80 and had a market cap of $4.2 billion.
Litecoin’s rally has been spurred on by renewed enthusiasm among Chinese traders. During the sell-off, most coins with CNY pairs experienced intense downward pressure. Now, LTC/CNY–which accounts for nearly $350 million in daily volume–is priced comparably to litecoin’s other pairs. Altogether, daily litecoin volume exceeded $800 million, trailing only bitcoin and ethereum.
Litecoin picked up dramatic momentum after developer Charlie Lee successfully tested Lightning transactions on the LTC network, a development made possible by the activation of SegWit. Assuming the market recovery continues, it would not be surprising if litecoin soon challenged the $100 level.
But it might not stop there. Now that bitcoin has activated SegWit, developers are preparing to deploy Lightning technology on top of the BTC blockchain, too. As CCN.com has reported in more detail, Lightning channels will support cross-blockchain transactions, along with other innovations such as instant payments. Consequently, investors should have reason to believe that the litecoin price will benefit as Lightning developers move closer to deploying this technology onto the bitcoin network.
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Last modified: May 21, 2020 9:16 AM UTC