The Litecoin price has been rallying for the past few weeks. It is trading 0.78% higher at $171.93. However, it is still nearly 55% below this year’s high on May 9. Its total market capitalization is $11.6 billion, ranking it the 15th largest cryptocurrency.
Litecoin and Bitcoin
Litecoin was created by Charlie Lee in 2011. Its users prefer using it because of its faster transactions. The coin was the first to adopt the lightning network hence making transactions faster. It was designed for everyday transactions.
LTC has a very close correlation to Bitcoin. According to its creator, Charlie Lee, the coin was created to be a better and cheaper version of Bitcoin. Hence, just like most cryptocurrencies, Bitcoin’s overall performance affects LTC’s price.
Bitcoin price has been rallying for the past few weeks. Most analysts have linked its rally to the decline in inflation and US Treasury yields. The resurgence of coronavirus has also seen most cryptocurrencies jump. A slowdown in the economy means a dovish Fed, which is a good thing for the digital currencies.
According to some FOMC members, the rise in inflation will prompt discussions on the hiking of interest rates. However, in Jerome Powell’s latest statement in July, he stated that the Federal Reserve was in no hurry to taper its monetary policy. The Fed will only initiate the talks once inflation hits the 2% target.
Another reason for the Litecoin price rally is the support from the Senate. Some members of the Senate that opposed the initial legislation on the increase in crypto tax reporting introduced a new amendment. In the new amendment, they excluded miners and developers.
LTC Technical Stance
The Litecoin price has been range-bound for more than two months. However, it broke out of the horizontal channel and is consolidating above the trading area. Along the way, it has formed a double bottom.
LTC is trading around 66% above its lowest point this year in June. On the daily chart, it is trading above the 50 and 100-day moving averages, reinforcing its bullish momentum. Its RSI is strong at 71.70, albeit it is overbought.
Therefore, the Litecoin price is likely to extend its bullish momentum as the bulls target the next resistance at $200. A move below the key support at $150 will invalidate this view.