The Litecoin price has diverged from Bitcoin. The LTC token is trading at $187, which is a few points below the key resistance of $192. The coin is about 55% below its all-time high of $412 and has a market capitalization of more than $12.8 billion. It is the 15th biggest cryptocurrency in the world.
Bitcoin and LTC correlation
Litecoin is a second-generation blockchain project that was launched in 2014. The goal of the developers was to provide users with an advanced version of a peer-to-peer payment currency. Today, Litecoin is similar to Bitcoin, with the difference being that its network is relatively faster and cheaper.
As a result, historically, Bitcoin and Litecoin prices have tracked each other. In most cases, Litecoin tends to rise when Bitcoin rises and vice versa. For example, the LTC price soared to an all-time high of $412 when Bitcoin moved to an all-time high of about $65,000.
Similarly, Litecoin price crashed hard when the price of Bitcoin declined from $65,000 to below $30,000. According to MacroAxis, the two cryptocurrencies have a correlation co-efficient of about 0.85.
However, recently, this correlation has been challenged. For one, Bitcoin is trading at $64,000, meaning that it has pared most of its previous losses. Its price has more than doubled from its lowest level in July.
On the other hand, Litecoin is trading at $187, which is substantially below its all-time high. At the same time, its price has risen by just 74% from its lowest level in July.
This divergence is mostly because more investors have focused on Bitcoin towards the launch of the first Bitcoin futures ETF. Indeed, on-chain data shows that more large investors have been buying Bitcoin. Large holders have maintained their holdings.
Litecoin price prediction
The daily chart shows that the LTC price has been in a tight range in the past few weeks. The price has found a substantial resistance at the $235 level. It has struggled moving above this level several times since September.
At the same time, the Litecoin price has moved slightly above the 25-day and 50-day moving averages while the MACD has been in a major bullish trend.
However, a closer look shows that the coin is forming what looks like a head and shoulders pattern. In price action analysis, this is usually a bearish signal. Therefore, there is a likelihood that the coin will have a major bearish breakout soon.