While Bitcoin was seen as “digital gold” and a potential long-term store of value, Litecoin was created to be “silver” and used for everyday purposes.
LTC has had a turbulent time in 2019, but how will Litecoin fare in 2020? Will higher volumes and fresh cash spur a new bull run after the disappointment of the halving?
Essentially, for any price appreciation to happen, we need serious volume coming into the cryptocurrency market.
In the short term, the outlook for Litecoin is quite grim.
Prior to mid-June, the altcoin was the best performing digital asset of 2019, growing more than 170% in fewer than 90 days and peaking at around $145. However, the uptrend sparked by the Litecoin halving did not last.
The reality is that the Litecoin halving, which took place a few months back, may have been a ‘buy the rumour, sell the news’ type of event. Seasoned traders took profits weeks before it took place.
However, the positive sentiment seems to have faded away again and LTC is back in a downtrend.
In Bitcoin terms, the outlook is even worse.
Looking at the chart above, we can immediately conclude that LTC is near its yearly low against Bitcoin.
At the moment, LTC is just above its 20-day EMA, sitting around 607,800 sats. Volume-wise, price is finding some weak support close to a key level, between 600,000 and 710,000 sats. The next strong level of resistance should be felt around 900,000 sats.
If LTC is able to break above the 50-day EMA and sustain some support below the 200-day EMA, we could see a sudden shift in investor preferences. However, for the time being, it looks like Litecoin is in for a period of accumulation.
Litecoin in 2020
Given Litecoin’s overall panorama, both in terms of USD and BTC, one could argue the altcoin is posed for a positive run during 2020.
For Litecoin to start a serious bull run, I believe fresh cash needs to come into Bitcoin initially before investors and traders move some gains into LTC.
The reason why I argue BTC has to pump first is due to historical reasons. Looking at both charts, it seems LTC/BTC moves before LTC/USD.
During 2019, LTC pumped prior to its own halving, which took price close to all-time highs in Bitcoin terms.
If Bitcoin recovers to its 2019 highs, around $14,000, we could definitely see some of the gains trickling down into the top altcoins such as Litecoin.
Charlie Lee has also confirmed privacy is on the horizon for Litecoin next year.
Litecoin is making moves to add privacy features through the Mimblewimble protocol.
According to Lee:
“We’re working with the Grim++ developers to add an implementation of Mimblewimble. It adds an extension block to the Litecoin main-chain. You can transact between chains to use enhanced privacy.”
The goal would be to give Litecoin users improved privacy features when transacting.
If there’s an altcoin fundamentally ready for a new push, LTC seems to be the one.
Will LTC moon in 2020? We’ll have to wait and see.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.