Despite the brutal retracement the cryptocurrency market saw this week, a top analyst is getting bullish on Litecoin, citing an array of technical factors.
While this may not seem relevant to many readers, as many of you may not trade or own the altcoin, LTC’s directionality could have a strong effect on the rest of the crypto asset class, Bitcoin included.
Litecoin Prints Number of Strong Buying Signals
The pullback in the cryptocurrency market hasn’t fazed analysts.
In fact, a popular trader, Byzantine General, is extremely optimistic about Litecoin, a cryptocurrency that has gained around 95% this year — outpacing BTC by 100%, though underperforming Ethereum and the Bitcoin hard forks.
In an analysis published Sunday, Byzantine General pointed to four technical factors suggesting LTC’s long-term price trend is looking surprisingly bullish:
- The one-week Moving Average Convergence Divergence (MACD) has turned bullish, seeing a positive cross.
- The one-week Ichimoku Cloud has crossed bullish.
- Litecoin recently flipped a “major” resistance region into support on a weekly basis.
- LTC’s weekly supertrend has turned bullish.
This Is Good for Bitcoin & Crypto Market
Our readers who don’t own or trade LTC may be wondering why this matters. Well, a weird correlation has formed over the past year or two where Litecoin’s price action is often later reflected in Bitcoin, which then causes the rest of cryptocurrencies to move.
The most memorable case of this was in the first half of 2019, which is when the altcoin suddenly began surging higher months prior to its block reward halving. For a few weeks, the altcoin rallied on its own, gaining dozens of percent week-on-week as the market was relatively flat. But eventually, Bitcoin started moving, following in the path blazed by LTC.
What if Litecoin is leading Bitcoin again, like it did last year? pic.twitter.com/VHB3RLm5rd
— Loma (@LomahCrypto) February 1, 2020
Furthermore, LTC front-ran Bitcoin just a few weeks ago, when it suddenly broke higher as BTC was stagnating. Bitcoin, of course, followed the asset higher just days later.
Litecoin’s ability to precede the rest of the market is important because it suggests that should LTC start rallying here, buoyed by the aforementioned technical factors, so too should Bitcoin.
There’s also been some talk about Litecoin’s pre-halving performance potentially predicting how Bitcoin will fare in the coming months, though this hasn’t been entirely fleshed out.
Featured Image from Shutterstock