Litecoin (LTC) has recovered over 30% since April 12th, which closely correlates with most crypto markets. The Pearson Coefficient of LTC and BTC has been 0.5457 since December. The LTC market cap now stands at US$8.34 billion, with exchange-traded volume of US$398 million in the past 24 hours.
Transactions per day also mirror other cryptocurrencies. However, LTC transactions per day still regularly exceed that of Monero, Bitcoin Cash, EOS, OmiseGo, DOGE, and Zcash. The LTC average transaction fee is currently US$0.18, and have never exceeded $US1.00. Recently, a US$99 million transaction cost just $0.40 and took 2.5 minutes to confirm, a process which could take several days with traditional banking institutions.
The network value to transactions (NVT) ratio is among the lowest of all coins, based on available data, suggesting the coin is underpriced based on its utility. The ratio can be used to assess the network’s relative utility over time, although NVT is difficult to compare between coins which use different transaction types.
Despite a relatively low NVT, the ratio is still increasing. A downward trending NVT is correlated with increasing prices. The only coins with a lower NVT are Doge, Cardano, NEO, Bitcoin, EOS and Decred.
Difficulty and hash rate continue to post record highs, with the next block reward halving set for August 2019. Hash rate will continue to increase with SHA-256 ASICs being widely manufactured. The most aggressive action against these ASICs would be changes to the consensus algorithm, which has not been suggested as of yet. Mining profitability continues to push all-time lows (not shown).
Exchange traded volume in the past 24 hours has been predominantly led by the Bitcoin (BTC), Tether (USDT), and U.S. Dollar (USD) pairs. The majority of trading has occurred on OKEX, GDAX, Bitfinex, Huobi, and Binance.
In Asia, the KRW trading pair holds a small premium, JPY volume shadowed by the BTC and USD pairs, and CNY volume absent. Although overall Asian influence on LTC prices remains low, Korbit, a South Korea exchange, recently added LTC to its platform. MarketWatch, a financial media website, also announced it will begin tracking LTC prices and releasing related news.
The bear trend for LTC is potentially nearing an end. The status of any nascent trend can be determined using Ichimoku Cloud, Pitchfork, Moving Averages, Support Zones, and Chart Patterns.
The Ichimoku Cloud uses four metrics to determine if a trend exists; the current price in relation to the Cloud, the color of the Cloud (red for bearish, green for bullish), the Tenkan (T) and Kijun (K) cross, and the Lagging Span. The best entry always occurs when most of the signals flip from bearish to bullish, or vice versa.
The status of the current Cloud metrics on the daily time frame are mixed, with singled settings (10/30/60/30) for quicker signals; price is below Cloud, Cloud is bearish, the TK cross is bullish, and the Lagging Span is below Cloud but above price. A traditional Cloud long entry would not occur until price is above Cloud with volume. This is known as a Kumo Breakout. Before this breakout occurs, price will likely meander in the Cloud to regain momentum.
The status of the current Cloud metrics on the daily time frame is entirely bearish, with doubled settings (20/60/120/30) for more accurate signals; price is below Cloud, Cloud is bearish, the TK cross is bearish, and the Lagging Span is below Cloud but above price. Again, a traditional Cloud long entry signal will not occur until price is above Cloud with volume. The flat Kumos at US$202 and US$240 should be considered high probability targets if price breaches Cloud resistance.
The status of the current Cloud metrics on the four hour time frame are entirely bullish, with doubled settings (20/60/120/30) for more accurate signals; price is above Cloud, Cloud is bullish, the TK cross is bullish, and the Lagging Span is above Cloud and above price. Price broke above the Cloud on April 18th, triggering the first signs of a bull trend and long entry signal. Price has since held above the Tenkan, recently consolidated on the Kijun, and then moved higher. This is known as a Kijun bounce and typically indicates trend continuation. A previous consolidation break at US$211 is a likely interim target over the next few weeks.
Price is currently outside of two potential bullish and bearish Pitchforks on the daily chart. This could indicate a trendless market, or suggest an alternative Pitchfork may better elucidate any active trend. While it’s important not to force arbitrary drawings on a chart, being creative can give a competitive advantage in analysis.
An alternative Pitchfork, with anchor points in December and February, shows price bound in a bearish trend. The price reaction to the diagonal support and resistance lines, as well as the attraction to the median line (ML), increase the validity of this Pitchfork. Price will continually attempt to return to the ML until breaking above or below the Pitchfork. Breaking above the yearly pivot at US$216 would be a conclusive bullish invalidation of this downward trend.
On the daily chart, price has remained above the 200 Exponential Moving Average (EMA), and the 50/200 EMA cross has remained bullish since April 2017. Strong trend continuation is likely when these EMAs touch but do not cross, as it suggests a complete momentum reset while maintaining the trend.
Lastly, on the LTC/BTC pair, the current ratio sits near historic highs for the pair. All previous bullish moves have occurred quickly, often over less than 10 weeks, whereas bearish moves have occurred much more slowly. If the current zone proves to be a consolidation level, expect explosive breakout and new all time highs for the pair.
In relation to other coins currently available, LTC usage remains relatively high based on several metrics. However, further development on LTC seems to have slowed or stalled with no new updates to the roadmap since last year. Regardless, low cost transaction fees and fast block times remain the essence of its competitive advantage.
Technicals suggest a shift from a definitively bearish trend to a nascent and subtle bull trend. Lower time frames have begun to suggest a larger move toward US$211 based on previous consolidation levels. The most significant evidence for bullish continuation is a failed bearish 50/200EMA cross, which should signify a complete bull trend restart with a high probability of high time frame trend continuation.