In addition to automated chart patterns, altFINS’ analysts conduct technical chart analyses of top 30 cryptocurrencies. We call these Curated Charts and they evaluate 5 core principals of technical analysis: Trend, Momentum, Patterns, Volume, Support and Resistance.
Litecoin (LTC) technical analysis:
Trade setup: Price is trading in a Sideways Channel ($50-$60). Swing Traders can trade the channel (Enter near $50 support, Exit near $60 resistance). (set a price alert). Fibonacci levels are $45 (78.6%) and $50 (61.80%).
Trend: Downtrend across all time horizons (Short- Medium- and Long-Term).
Momentum is Mixed as MACD Line is above MACD Signal Line (Bullish) but RSI ~ 50 (Neutral).
OBV (On Balance Volume): is flat, indicating that volume on Up days is equal to volume on Down days. Hence, demand from buyers and supply from sellers are in equilibrium
Support and Resistance: Nearest Support Zone is $50, then $40. The nearest Resistance Zone is $60, then $75.
See more curated charts for top 30 coins.
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What is Litecoin (LTC)?
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Litecoin is a fork of Bitcoin’s codebase with four times faster block times and a four times larger supply. The project considers itself complementary to Bitcoin as a silver to Bitcoin’s gold. It is often used as a pseduo-testnet for Bitcoin, adopting new protocol changes before they are deployed on Bitcoin.
Created in October 2011 by ex Google and Coinbase engineer, Charlie Lee, Litecoin is a fork of Bitcoin’s source code that posits itself as “a silver to Bitcoin’s gold.” Technically, it is nearly identical to Bitcoin with key differences relating to block time, supply, hashing algorithm, and initial distribution. Litecoin aimed to keep the best aspects of Bitcoin while making some optimizations for its use as a medium of exchange. Notably, it implements 2.5 minute block times and an 84 million max supply. Charlie Lee’s original thinking was that quicker block confirmations would increase transaction throughput and reduce the amount of time merchants would need for block confirmations. Additionally, he thought the 84 million max supply would prevent the coin from becoming too scarce and expensive.
Litecoin uses Scrypt, a memory intensive hashing algorithm, in order to better allow individuals to mine it with commodity hardware (although ASICs have been developed for Litecoin mining over the past few years). Finally, Charlie Lee, recognizing the mistakes of the few altcoins launched previously, wanted Litecoin to be launched in a fair manner, electing to only do a 150 coin (3 block) premine to allow people to get in early. Charlie Lee left Coinbase in June 2017 to head the Litecoin foundation, which stewards the project, and finances core development.
The protocol is a distributed, time-stamped ledger of unspent transaction output (UTXO) transfers stored in an append-only chain of 1MB data blocks. A network of mining and economic nodes maintains this blockchain by validating, propagating, and competing to include pending transactions (mempool) in new blocks. Economic nodes (aka “full nodes”) receive transactions from other network participants, validate them against network consensus rules and double-spend vectors, and propagate the transactions to other full nodes that also validate and propagate. Valid transactions are sent to the network’s mempool waiting for mining nodes to confirm them via inclusion in the next block.
Mining nodes work to empty the mempool usually in a highest-to-lowest fee order by picking transactions to include in the next block and racing against each other to generate a hash less than the target number set by Litecoin’s difficulty adjustment algorithm. It uses a Proof-of-Work (PoW) consensus mechanism to establish the chain of blocks with the most accumulated “work” (a.k.a., energy spent on solved hashes) as the valid chain. Other network peers can cheaply verify the chain’s work.
Supply Curve Details
Litecoin was created as a clone of Bitcoin meant to have four times the supply, as well as generate blocks four times as fast. Bitcoin’s parameters were changed in order to achieve this, with the result that eventual supply will top out at no more than 84 million coins. On average, it generates new blocks every 2.5 minutes, rewarding miners with 12.5 new LTC and the total transaction fees from the preceding block. Each block has a 1MB limit and block rewards are halved every 840,000 blocks (approximately 4 years).
Litecoin’s first halvings occurred on August 2015 and August 2019. The next halving will occur in August 2023. Eventually, once the 84 million LTC hard cap has been reached, block rewards will transition entirely to transaction fees shifting the security model of the protocol to one based on demand for block space versus one based on demand for LTC. Similar to bitcoin, Litecoin’s supply dynamics are known with great precision, and the vast majority of all eventual coins will be minted in the first two decades.
Litecoin uses Nakamoto Consensus whereby the valid chain is the longest chain with the most accumulated proof-of-work. Consensus in Litecoin, and other systems using Nakamoto Consensus, is probabilistic because there is always a chance that a new, longer competing chain could emerge with more accumulated proof-of-work, that would invalidate the current chain. Mining Miners solve computational puzzles to generate new blocks using a Scypt algorithm. In this process, miners compete to generate a hash less than the target number set by Litecoin’s difficulty adjustment algorithm. Similar to Bitcoin, the target difficulty level is adjusted every 2016 blocks; however, due to it’s 2.5 minute block times, the difficulty level adjusts more quickly than Bitcoin’s.
Litecoin originally implemented the Scrypt algorithm for its memory intensive properties, which made it more resistant to ASICs; however, over time it’s ASIC resistant properties have eroded with Scrypt-capable ASICs having been developed. Furthermore, in order to smooth individual miner revenue as mining has become more competitive, mining is now done in pools where participants contribute hash power to the pool and receive a proportional share of the profits if the pool finds a valid blocky.
Asset profile is provided by messari. Original version can be found at Messari