by Jamie Holmes
Volume is a key indicator in the markets; for litecoin, this key metric over the past 24 hour approached half a million bitcoin or, in other words, $7.74 billion. The interest shown by investors and traders is equal to half the altcoin’s market capitalization.
Closing December 11 around $210, litecoin has continued to surge on December 12. Over the past 24 hours, LTC-USD smashed the $300 handle. The price at the time of writing stands at $370.55 and peaked at $420 on GDAX; the exchange accounts for around one quarter of the influx of orders.
The daily chart below shows the Market Facilitation Index was green for Dec. 11 and 12, suggesting a lot of new buyers are entering the market and that the uptrend will be sustained. The MFI is green across most of the major exchanges, whereas if it were blue, it would indicate a ‘fake’ and the upward move would most likely not be sustainable.
LTC-USD (Daily, Coinbase)
We also see that since the fractal low at $95.01 on December 12, the market has displayed four near consecutive higher highs, meaning that we could see the current bull run peak around December 18 before profit-taking and a retracement force LTC-USD lower. Look for the MFI to turn brown (fade) for an indication of a reversal.
Looking at the weekly price action below, we see that LTC-USD has made six near consecutive higher highs. However, the Market Facilitation Index is blue, suggesting the large upward move this week is a ‘fake,’ large players in the exchanges are suggested to be manipulating prices and the large increase in value is not supported by fresh volume. Nevertheless, further confirmation will be given on the close of the weekly candle, as the MFI is prone to change color sometimes over time until the candle closes. The blue MFI basically serves as a light warning to buyers this week at this point in time.
LTC-USD (Weekly, Coinbase)
The 1-hour price action on the Bitfinex exchange is shown below. After reaching a fresh all-time high at $320.00, we should see the market cool off and approach the $250-$260 zone. A break of $320.00 opens up $384.11 while a break below $295.15 would be considered bearish for the short-term price action.
LTC-USD (1-hour, Bitfinex)
The LTC-BTC trading pair on the Bittrex exchange is shown below. The outlook is very bullish. As noted in our previous litecoin price analysis, the market tended toward 0.0178 after breaking the fractal resistances highlighted below. Now we look for LTC-BTC to test the 2017 high at 0.0220 and break to fresh highs.
There are two indications worth noting; firstly, the MFI for December 12 is a ‘squat,’ the most profitable MFI signal, suggesting a huge bullish continuation is coming. There is a bullish bias since the market is testing the fractal resistances around 0.0190. Secondly, the Awesome Oscillator has turned positive and has turned green in color, suggesting momentum will be in favor of buyers.
LTC-BTC (Daily, Bittrex)
Disclosure: The author owns both bitcoin and litecoin, and does not plan to take any new positions in LTC-USD or LTC-BTC in the next 48 hours.