3 reasons why Litecoin (LTC) has risen 61% in just one week
In the last seven days, the Litecoin price has risen by over 60%. It is the best performing cryptocurrency in the last week, outperforming both Bitcoin and DeFi tokens (decentralised finance).
There are three main reasons why Litecoin has rallied in tandem with Bitcoin. The reasons are a breakout against BTC, the historical relevance of LTC in previous bull cycles Bitcoin Fortune and the growing certainty around BTC’s price cycle.
Litecoin has broken out against Bitcoin
Most altcoins are still stagnant against the bitcoin pair. The ETH/BTC pair, as an example, is far from seeing a breakout over any low time frames in the near future.
Litecoin, however, has shown strong momentum and a favourable technical structure to outperform bitcoin in mid-December.
Jonny Moe, a crypto swing trader, writes:
„$LTC on the $LTCUSD chart is just absurd, but most of it was just in lockstep with $BTC, so there wasn’t much alpha here. If the $LTCBTC pair gets its breakout, that could change pretty quickly. Also worth noting, $LTC is the only major altcoin that has really kept pace with $BTC.“
Due to LTC’s momentum and the fact that it is the only large-volume altcoin that has kept pace with BTC, market sentiment around LTC has improved significantly.
Historical relevance of LTC in bull cycles
A pseudonymous trader known as „Byzantine General“ writes that the ongoing Bitcoin rally is a result of institutional investors.
As a result, the altcoin market may take a while to recover because institutions are focused on Bitcoin, he said.
But the trader singled out Ethereum as an outlier that actually has fundamental value. Although LTC is less secure than Ethereum, the trader writes that he is not bearish on LTC. He writes:
„Reality check on altcoins you probably don’t want to hear. This $BTC rally came because of institutional orderflow. These people are not going to gamble on random sh*tcoins. ETH is an outlier. Basically there are only 2 coins where the outside world sees fundamental value and that is BTC & ETH. So ETH should be good. LTC is less safe, but still a useful coin, so I’m not particularly bearish on it.“
Altcoins are in an awkward position: if Bitcoin continues to rise, they will stagnate against BTC. If Bitcoin’s price falls, then altcoins are likely to suffer even greater declines.
Litecoin’s strong performance against Bitcoin in this environment shows strength and resilience on a technical level. In the foreseeable future, it remains to be seen whether Bitcoin consolidates above $23,000 or experiences a major correction by the end of the year.
If Bitcoin consolidates above $13,000 with relatively low volatility, this would create an ideal period for the altcoins to rally. If that happens, the altcoin that has held up well against Bitcoin, Litecoin, has a higher chance of rallying again.