Litecoin (LTC) reclaimed its bullish momentum after a decline yesterday. The price has risen from $56.14 to $57.69 during the Asian session today. This marks an over 155 pips gain for CFD traders. The bulls seem to be taking profits gradually as the market awaits the outcome of the NFP report tomorrow. Litecoin and every other cryptocurrency have been pegged to the US dollar. Thus, the next target for Litecoin will depend on tomorrow's outcome of the NFP report. Should the report favour the US dollar through a reduction in the unemployment rate, we can expect a short for Litecoin and every other crypto asset. On the contrary, should the NFP report tomorrow disfavour the US dollar, we can expect Litecoin to benefit massively from the resultant dollar weakness and move to new highs.
Nonetheless, Litecoin has managed to stay above the 60-day moving average (MA) for over seven days and is currently up by 5%, signalling a strong bullish trend for this coin to maintain.
Understanding Litecoin (LTC)
Litecoin ranks among the oldest cryptocurrency created in the history of blockchain technology. Thus, the coin was created two years after Bitcoin, on 7th October 2011, by the former Google engineer - Charlie Lee. From its creation till the present moment, Litecoin has consistently ranked among the most crucial cryptocurrency traded today in the market. One of the primary reasons investors are attracted to this coin is because it shares similar features with Bitcoin.
According to CoinMarketCap, Litecoin is currently at $4.12 billion, placing it as the 20th most valuable cryptocurrency in the world today.
Litecoin as a digital asset has a total supply of 84,000,000 with a circulating supply of 70,562,618. This has dramatically reduced its chances of excessive deflations or price crashes.
What is the use case for Litecoin?
Litecoin has a similar use case to Bitcoin and every other cryptocurrency, which serves as a digital store of values and means of exchange. However, Litecoin has a high-speed network that instantly makes transactions easy to execute. Litecoin is one of the more outstanding cryptocurrencies offering a high-speed network at the lowest cost for all transactions. Due to the low volumes of transactions on its blockchain, many would consider using the Litecoin network more advantageous than Bitcoin and other networks.
Added to this, Litecoin had been designed to improve some of the shortcomings of Bitcoin, such as slow transactions, low processing speed, and monopoly over mining. Hence, it was created with a proof-of-work (PoW) mining system, enabling miners to earn rewards for adding new blocks to its blockchain.
What is the forecast for Litecoin in 2022?
Given the strong potential associated with Litecoin, analysts have predicted that this coin could rise above $150 in 2022. Some believe this coin will attain at least half its all-time-high recorded last year at $413.49.
Why did the price of Litecoin fall so low in 2022?
The primary cause of the fall witnessed in Litecoin in 2022 was the abrupt bear season that fell upon the crypto industry. Bearish dominance was engineered by the Fed's successive interest rate hikes that boosted the US dollar to the detriment of all risky assets, including Litecoin and every other cryptocurrency. Hence, we witnessed massive dumping in all crypto assets during the first half of 2022. Bitcoin and altcoin cryptocurrencies retested their previous lows and are currently showing signs of recovery amidst expectations that the Fed might slow down on aggressive interest rate hikes.
Is Litecoin a good investment?
Litecoin has shown strong resilience from its creation up to the present moment. The price has increased more than 1500% from its $4.30.
Investors are optimistic that this coin will likely close the year higher. Hence, some analysts would consider this coin an excellent investment opportunity.
Above all, one of the best ways of maximising profits from trading Litecoin is to trade it as CFD using the ATFX broker's platform.