Litecoin reached 68% 24 hours gains today crawling up to $2 again and surpassing it. Its gains for today outranked all major cryptocurrencies. However, many investors are worried that this is just a pump and dump. The correction was in fact quite swift as litecoin sits at around 35% gains right now.
The correlation between bitcoin and litecoin
We all know that litecoin was created envisioning a lite version of bitcoin. That’s sort of how it works when it comes to trading as well, and there has always been a strong correlation between bitcoin’s and litecoin’s price. When compared, the charts of both coins share many similarities.
It’s clear that litecoin stopped ‘trailing sideways‘ after a huge buy wall that caused some interesting market movement. Buy orders were fulfilled after bitcoin had some upward movement as well.
What’s causing the upward movement?
There are several factors that could have had an effect on those movements. Firstly, a block halving is going to be taking place in 2015 for litecoin. As a natural result, many miners have already stopped mining the coin and there may be more volatility to follow.
The above image compares litecoin’s network difficulty with it’s value over time. It wouldn’t be unreasonable to assume that this year’s block halving is what’s driving traders to put on more buy orders. But that’s not the only thing, as litecoin developers did an AMA on reddit. Most interesting thing to come out of it is probably the developer /u/aspect_ suggesting that “2015 will be a very interesting year [for litecoin]” as a reply to the AMA. Although it’s unlikely that this is what caused a $9 million spike on the volume, it might have contributed a little on the recent spike.