Litecoin could see a healthy rebound and break the $ 300 mark in June
Litecoin is a Bitcoin fork. Charlie Lee, its creator, envisioned a version of Bitcoin that would process payments faster and use less energy to process 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 become a useful complementary alternative to Bitcoin. Litecoin is at the center of several fintech projects that originally wanted to include Bitcoin. The importance of cryptocurrency in global finance only grew after the core development team adopted the Lightning network protocol. For many, the launch showed fantastic ambitions for Litecoin and reaffirmed the belief that its future as a reliable and classic altcoin is bright.
What is the current Litecoin price?
Litecoin price was $ 177.58 at the time of writing, according to CoinMarketCap, up 2.36% from its last closing price 24 hours ago. Within the last 24 hours of trading, Litecoin (LTC) had hit a low of $ 172.52 and a high of $ 180.02.
Although the LTC price is green, it still represents a significant drop from the record valuation of $ 387.23 set on May 10, 2021. Even so, the current Litecoin price is a remarkable rebound from the current low of $ 141.49 that was hit on May 24, 2021.
Litecoin price chart. Source: CoinMarketCap
Litecoin Price Forecast
June is an important month in the Litecoin ecosystem due to specific critical developments. Developments will have a huge impact on market sentiment and the price of crypto. Before we get into the details, it helps to understand where the market stands in terms of support and resistance for Litecoin price action.
First the resistance. The first price point we will keep an eye on this month is the all-time high of $ 388 as the main resistance. If the current price action trend continues, the next critical resistance level we will focus on will be the February high of $ 240. The price point is critical as it is the previous year high prior to the May breakout. Finally, the April opening of $ 200 is an interesting point. This price point is critical as it marks the most recent opening which started the rally at its all-time high in mid-May.
We will be watching the $ 118 year-on-year lows for support levels, which were set on May 23, 2021. The $ 170 200-day moving average is also a major support level on our radar. If the Litecoin price holds above the 200-day MA, we will likely see the token rise 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- and 50-day moving averages at the same time. Over the past two weeks sellers have thinned out 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. The MACD also points to the beginning of a trend from the sharp correction in mid-May.
Litecoin / USD price chart. Source: TradingView
Events That Could Move The Price Of Litecoin In June
The MWEB data protection protocol
The likelihood of Litecoin breaking above the year high becomes greater when you consider the upcoming data protection update. The update is known as the MimbleWimble Privacy Protocol or MimbleWimble Extension Block (MWEB) and it obfuscates transactions on the Litecoin network to prevent unauthorized access to the details.
MWEB will run in parallel with the Litecoin network, meaning it won’t have any noticeable impact on current transaction speeds. The fact that MWEB makes transactions traceable and transparent and yet confidential marks a decisive milestone in the blockchain area. So far, blockchain developers have not been able to combine the confidentiality of transactions with privacy, which has put many people off the ecosystem.
The MWEB tool is notable in that it is likely to attract hordes of users towards Litecoin. The positive market sentiment emerging from the shift will push the Litecoin price to new records. With Charlie Lee and his team expecting the MWEB tool to be out in the market by September, one cannot argue against the possibility that Litecoin will finally cross the $ 500 mark.
In the meantime, investors will be on the lookout for regular updates on the MWEB roadmap. The latest update from Litecoin’s lead developer David Burkett indicates that they are “on their way to activation towards the end of the year unless there are major surprises from auditors”. Burkett announced that the coding and testing phase of the project was almost complete.
Litecoin is a leading Bitcoin indicator, which means that the fluctuations in price of the former herald the impending fluctuations in the price of the latter. The opposite is also true.
Bitcoin fell 41% on May 31, 2021 after climbing to a record high of $ 60,799.77 on April 12, 2021. The slump is the latest in a series of large declines the market has seen since early 2018 and V-shaped rebound after each episode of decline, particularly in 2021.
The following figure shows the bitcoin price fluctuations over the past eight months. After every negative performance, the cryptocurrency recovers in a V-shape.
Bitcoin price fluctuations in 2021. Source: Yahoo Finance
If each episode were represented by an isosceles triangle (highlighted in yellow), the most recent break-in would appear to be the biggest. So far, one long side of the triangle represents a 41% decline. Should the recovery pattern continue, there is a chance that Bitcoin will soon recover by up to 50%.
If the BTC recovery takes place, Litecoin would also gain significantly – because one crypto is a leading indicator for the other.
Increased acceptance of cryptocurrency crypto
According to CoinMarketCap, Bitcoin accounts for 40.9% of the total market capitalization of cryptocurrencies as of May 7, 2021. It means that any advances Bitcoin makes will also affect all of the rest of the crypto-verse.
So what happens if Bitcoin is accepted as legal tender in a sovereign nation? On June 5, El Salvador’s President Nayib Bukele announced that his country was considering making Bitcoin legal tender. The country plans to make the dream come true in partnership with Strike, a digital wallet company.
If the legislation passes El Salvador’s Congress, Bitcoin will serve as the country’s main currency. The reports have already had a positive impact on market sentiment as Bitcoin has gained up to 0.5% since the news was released. It remains to be seen what Congress will say; confirmation will certainly send the crypto-verse into a new wave of bulls. Like all other altcoins, Litecoin will certainly benefit from these developments.