Renewed interest in one of the oldest, most successful alternative cryptocurrencies has driven buy pressure likely added to by an upcoming halving of the block reward, meaning a reduction in new coins introduced into the economy.
The halving of the block reward is the most likely explanation, although there would have remained a high number of cheaper sell orders on the market from previous mining. (Editor’s input: It might also be due to the spam attack on Bitcoin that is not affecting Litecoin – described here.) These all must have been scooped up in quick fashion by traders. The markets have been particularly kind to several alt coins lately, and Litecoin is the most recent to see a return to prominence. Whether this is market movers and shakers leaving the Bitcoin space in favor of other cryptocurrencies, newcomers entering the space and speculating the price of Litecoin upwards, traders from China and other parts of Asia, is uncertain. However, the fact that there will be lower inflation of existing Litecoin holdings soon probably means people want to secure as much Litecoin as possible.
As you can see in the above graph, things have gone upwards steadily in the past 48 hours. It is very difficult to judge the proper value of a cryptocurrency, as it is about everything else. The price of Bitcoin has not suffered as a result of recent controversies that have taken place, that much is for sure, as the price has instead gone the other direction.
The recent boost in the price of Litecoin is somewhat contradictory to what Charlie Lee has said in the past about it. He previously told Zapchain that the price of Litecoin was tied to the price of Bitcoin. If the price of Bitcoin does well, so will the price of Litecoin, and so forth. But the price of Litecoin has doubled and almost quadrupled, whereas the price of Bitcoin has only seen modest gains.
As with any rally, there are bulls and bears. The jump in the price is somewhat unexpected for many watchers of this space, especially those who had come to believe that there was nothing left for Litecoin to do but die a slow and quiet death. It is important to note that Litecoin has maintained one of the top ten market capitalizations among cryptocurrencies for most of its existence, and it has seen prices much higher than this in the past. Whether this is only a temporary pump, a preface to a massive dump, remains to be seen, but at present buy pressure on the higher side exists.
Images from Pixabay, Cryptsy, and Litecoin.Follow us on Telegram or subscribe to our newsletter here.
• Join CCN's crypto community for $9.99 per month, click here.
• Want exclusive analysis and crypto insights from Hacked.com? Click here.
• Open Positions at CCN: Full Time and Part Time Journalists Wanted.