During last week’s crypto market meltdown, Litecoin was one of the few cryptocurrencies that ended up not taking huge losses. This was despite Litecoin price plunging by about 15 per cent and slightly mirroring the Bitcoin trend.
Today, Litecoin has also remained among the best-performing cryptocurrency and is already up by almost 4 per cent for the week. It has also been able to crawl back by more than 25 per cent from last week’s price low of $54.
Why Litecoin Price is Recovering
There are many reasons why the current Litecoin price trend looks positive. One of these reasons is Litecoin is trading in tandem with the cryptocurrency industry, which is also recovering. Another reason is the current outflow of Bitcoin from exchanges. This has left Litecoin with no serious competitors in these exchanges, which many investors see as a net positive. The outflows follow the fall of FTX and revelations that their users’ deposits had been redirected to Alameda research without customers’ consent. Therefore, most cryptocurrency holders have started to transfer their Bitcoin assets into cold storage, which they now consider safer than cryptocurrency exchanges.
There have also been other fundamental signals that point to Litecoin being on the verge of recovering to the pre-FTX collapse level. One of these signals is the recent increase in mining difficulty. Recent reports indicate the difficulty is poised to hit new highs, which in most cases, translate to a sustained long-term bullish trend, which will be positive for Litecoin’s future.
Looking at the chart below, it is also clear that Litecoin is currently in a bullish trend. Following its recent recovery from last week’s price low by 25 per cent, I expect to see a continuation of the bullish trend.
Therefore, my Litecoin price prediction expects it to hit the $65 resistance level, and possibly trade above it. There is a high likelihood that we might even see it trading above $70 before the end of the month. However, a drop below the $50 price level will invalidate my bullish analysis and signal a likely start of a bearish trend.