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Litecoin was one of this week’s biggest cryptocurrency movers and shakers, substantially beating Bitcoin as well. The bullish momentum led the altcoin to a one-year downtrend line against BTC, but was unfortunately pushed back.
With the general consensus that Litecoin often leads the way for altcoin trends, a further drop against Bitcoin could come – as analysts predicted.
Litecoin glows green as the cheapest cryptocurrency on PayPal
Litecoin was left behind this summer’s altcoin season as Ethereum and DeFi absorbed all of the capital. When that trend ended, the tides turned to Bitcoin. But now, it may finally be Litecoin’s turn.
Although the altcoin referred to as digital silver has had a lackluster 2020, it may end up being the cryptocurrency that benefits most from the biggest news of the year.
No news has even come close to PayPal supporting cryptocurrencies and offering them to the company’s 350 million users. It was the “hit heard” around the world on Wall Street, “according to crypto bull Mike Novogratz.
It was also the catalyst that potentially sparked a new bull market for Bitcoin. PayPal currently offers only four cryptocurrencies: Bitcoin, Bitcoin Cash, Ethereum and Litecoin.
Litecoin è stato rifiutato sulla linea di downtrend contro BTC | Fonte: LTCUSD su TradingView.com
Litecoin, being the cheapest of the bunch and still sporting a meager supply, responded with an explosive move of more than 25% this week alone.
The daily chart above shows a clear break of Litecoin’s downtrend line against the dollar. However, against Bitcoin, things are not going quite as well.
Litecoin was rejected at the downtrend line against BTC | Source: LTCBTC on TradingView.com
Are Altcoins Ready to Crash Further Against Bitcoin?
In the chart above, Litecoin was rejected for the fourth time by a downtrend line resulting from the 2019 altcoin peak. During that time, Litecoin had started the year with a bang due to the block reward halving. The asset achieved a 500% return before a massive crash. Bitcoin raced for $ 13,800 leaving the alts behind, starting the bearish trend on the LTCBTC pair.
An “apocalypse” ensued, setting even deeper lows on each currency’s BTC ratio.
Litecoin’s weakness on the BTC pair could suggest that there is yet another large drop left for altcoins versus Bitcoin.
As Bitcoin runs to its all-time high, altcoins may once again fall victim to the rise in BTC as they did last year.
The path to the next altcoin season arrives after Bitcoin sets a new record | Source: CRYPTOCAP-BTC.D on TradingView.com
BTC’s dominance is also being disrupted by an expanding wedge pattern. The goal is similar to the previous structure’s measured move, which would bring the metric back to 83%, completely wiping out the altcoins in the process.
Altcoins may continue to be dragged higher in USD value due to Bitcoin’s bull run, each altcoin’s ratio may drop further to break the current lows.
Related reading | This is why crypto analysts are divided on the future of altcoins
The only saving grace for Litecoin may be the fact that the recent altcoin season skipped it altogether. “Paleo-alts” is a recently coined term that refers to a class of older altcoins that have been forgotten for the shiny new DeFi tokens. XRP is another, for example.
Litecoin was rejected at the downtrend line against BTC | Source: LTCBTC on TradingView.com
The two laggards along with other archaic alt by crypto standards may still do well as Bitcoin has squashed the rest of the space.
When LTC outperforms the major cryptocurrency, it increases from 150 to 450% based on the ratio.
With Bitcoin becoming more expensive by the day and out of reach for retail investors, and Litecoin acts as the most convenient way to own full coins on PayPal. the downtrend line that is currently holding LTC may not last much longer.
Featured image from Deposit Photos, Charts from TradingView.com
