Litecoin might post a healthy recovery and breach the $300 level within June
Litecoin is a Bitcoin fork. Charlie Lee, its creator, envisioned a version of Bitcoin that handles payments faster and requires low energy consumption to settle transactions. In other words, Litecoin is Bitcoin lite. The cryptocurrency is, therefore, ideal for microtransactions such as paying for a cup of cappuccino.
Over time, Litecoin has risen to become a useful complementary alternative for Bitcoin. Litecoin is at the center of several fintech projects that originally intended to incorporate Bitcoin. The cryptocurrency’s stature in global finance grew even more after the core developer team adopted the lightning network protocol. To many, the adoption indicated fantastic ambitions for Litecoin and reasserted the belief that its future as a reliable and classic altcoin is bright.
What is the current Litecoin price?
The Litecoin price was, as per CoinMarketCap, is $177.58 at the time of writing, representing a 2.36% increase from the last close 24 hours ago. Within the last 24 hours of trading, Litecoin (LTC) had touched a bottom of $172.52 and a peak of $180.02.
While the LTC price is green, it still represents a significant decline from the record valuation of $387.23 established on May 10, 2021. Nevertheless, the current Litecoin price is a remarkable recovery from the current bottom of $141.49 touched on 24 May 2021.
Litecoin Price Forecast
June is an important month in the Litecoin ecosystem because of specific critical developments. The developments will have a huge impact on the market sentiment and the price of the crypto. Before we delve into the details, it helps to make sense of where the market stands in terms of support and resistance for Litecoin price action.
First, the resistance. The first price point we will watch for this month is the $388 all-time high as the key resistance. If the current price action trend continues, the next critical resistance level we will focus on is the February high of $240. The price point is critical because it is the previous yearly high before the May breakout. Lastly, the April open of $200 is a point of interest. This price point is crucial because it marks the most recent open that kicked off the rally to the all-time high price in mid-May.
We will be watching the $118 yearly lows for the support level–established on 23 May 2021. Also, the 200-day moving average of $170 is an important support level on our radar. If the Litecoin price holds above the 200-day MA, we will likely see the token advance above $200 in the next few days.
Litecoin/USD price chart. Source: TradingView
However, $300 in June is a real possibility if the price breaks above the 21-day and 50-day moving averages simultaneously. Over the past two weeks, the sellers have been thinning as more bulls place their bets on a stronger Litecoin this month. As you can see below, the RSI has made a remarkable turnaround from 30.00 to 42.20 at the time of writing. Also, the MACD indicates the beginning of a trend out of the sharp correction of mid-May.
Litecoin/USD price chart. Source: TradingView
Events That Might Move the Litecoin Price in June
The MWEB Privacy Protocol
The probability of Litecoin breaking above the yearly high becomes stronger when you consider the upcoming privacy update. Dubbed the MimbleWimble privacy protocol or MimbleWimble Extension Block (MWEB), the update obfuscates transactions on the Litecoin network to prevent unauthorised access to the details.
MWEB will run parallel to the Litecoin network, meaning it will not have any perceivable impact on the current transaction speeds. The fact that MWEB makes transactions traceable and transparent yet confidential marks a critical milestone in the blockchain space. Hitherto, blockchain developers have been unable to marry confidentiality of transactions with privacy, which has dissuaded many people from the ecosystem.
The MWEB tool is remarkable in that it is likely to attract hordes of users in Litecoin’s direction. The positive market sentiment that will arise from the shift will push the Litecoin price to new records. Since Charlie Lee and his team expect to launch the MWEB tool by September, one cannot argue against the possibility of Litecoin crossing the $500 mark for good.
In the meantime, investors will be looking out for regular updates on the MWEB roadmap. The most recent update from Litecoin lead developer, David Burkett, indicates they are “on track for activation around the end of the year, barring no major surprises from the auditors”. Burkett revealed that the Coding & Testing phase of the project was almost complete.
Bitcoin declined 41% on May 31, 2021, after climbing to the record peak of $60,799.77 on April 12, 2021. The slump is the latest in a series of major declines the market has seen since early 2018. Interestingly, Bitcoin has always achieved a V-shaped recovery after every episode of decline, specifically in 2021.
If each episode were to be represented by an isosceles triangle (marked in yellow), the latest slump seems to be the largest. So far, one long side of the triangle represents a 41% decline. If the recovery pattern were to hold, there is a chance that Bitcoin will recover by as much as 50% soon.
Increased adoption of cryptocurrency
Bitcoin accounts for 40.9% of the total cryptocurrency market capitalisation as of 7 May 2021, according to CoinMarketCap. It means whatever progress Bitcoin makes will also impact the entire rest of the cryptoverse.
So, what happens when Bitcoin is accepted as legal tender in a sovereign nation? On 5 June, El Salvador President Nayib Bukele revealed that his country is mulling the designation of Bitcoin as legal tender. The country plans to deliver the dream in partnership with Strike, a digital wallet company.
If the legislation passes the El Salvadorian congress, Bitcoin will serve as the country’s primary currency. Already, the reports positively impacted market sentiment as Bitcoin gained as much as 0.5% since this news became public. It remains to be seen what the congress will say; an affirmation will certainly send the cryptoverse into a fresh bull wave. As with all other altcoins, Litecoin will certainly benefit from these developments.