Litecoin (LTC) is a leading alternative coin, commonly shortened to “altcoin.” Altcoins are simply cryptocurrencies (“cryptos”) other than Bitcoin. Litecoin was created in 2011, making it one of the earliest altcoins. It is also one of the most trusted and commonly used, and many Litecoin Exchange sites exist. Litecoin’s price has risen along with many other cryptocurrencies in recent months. However, it suffered a setback in mid-January. This has left some investors uncertain about the future price of this crypto. Read on to learn more about the state of Litecoin.
Litecoin’s Meteoric Rise in Recent Months
The price of Litecoin had been rising rapidly from September 2020 to January 2021. It had risen by roughly 225% during this period. It had actually been increasing at an even higher rate in early January, as it rose over 20% in the period from January 1st to the 9th. The rising price of Litecoin and other cryptos came as faith in government-backed fiat currencies declined due to the economic downturn caused by the COVID pandemic. Also, cryptocurrency is increasingly seen as a safe and legitimate investment. Despite the rise of Litecoin, Bitcoin, and other altcoins in recent months, some crypto investors had predicted that Litecoin would soon experience a sudden fall. This turned out to be true.
Litecoin Declines in Mid-January
Litecoin declined sharply from January 9th to January 11th. It reached a peak price on January 9th and began declining, eventually finishing down over 7% from its previous high that day. The decline continued on January 10th, where it lost roughly 15% more of its value. The most pronounced decline was seen on January 12th, when LTC lost roughly 35% of its value. There are several different reasons for this steep decline and the quick bounce back.
Why Litecoin Declined
Analysts point to a few different factors to explain the sudden decline of Litecoin and several other altcoins. Investors began to feel that the price of LTC had reached a selling point, and numerous investors began selling off large quantities of LTC. This caused the price to drop. The US dollar also experienced a significant rise due to concerns about the Chinese economy as the government expanded its coronavirus lockdown. Several countries in Europe also began to consider expanding their coronavirus restrictions. Also, political developments in the US contributed to the strong dollar. Finally, Litecoin’s decline was also linked to the overall performance of stocks and other commodities.
Litecoin Bounces Back
Litecoin bounced back from this decline rather quickly, with the price rising sharply on the 12th of January. Investors felt that the sudden steep decline had undervalued the currency, leading to LTC rising by roughly 30% by the time the markets opened on the 12th. It declined somewhat during the 12th, but still finished significantly above where it had finished at the close of trading on the 11th. Litecoin rose by roughly 15% on the 13th. It has been relatively stable since then.
The Short-Term Outlook for Litecoin
The short-term outlook for Litecoin is uncertain. Many investors feel that a drop will lead to a continued downward trend, while a rise will lead to a continued upward trend. As with all crypto prices, the price of LTC is hard to predict.