Litecoin - Play the Pump and Dodge the Dump
Litecoin is goin’ up, and many people are ecstatic. Congratulations to all LTC holders on realizing gains on your investment. I know with how this coin dumps during downswings that it hasn’t been easy. To those who had strong hands, you earned your money.
I believe that when investing, fundamentals are everything. You start with a bed of fundamentals and then technicals are the next step.
When day trading, fundamentals matter pretty much not at all. It's all about what's going up and what's going down, and people chase these gains to various degrees of success (or lack thereof).
So, which path to follow comes down to whether or not you’re here to play the pump and dodge the dump, or here to invest in Litecoin.
I believe that right now, there is a combination of three factors driving the Litecoin price upwards.
- Bitcoin Legacy fees are $40-60/byte
- Ethereum transaction fees are not nearly as high, but confirmations are very slow because of Cryptokitties
- A tremendous amount of new users are being on-boarded through Coinbase while it's top app in the Apple Store
Supplementary to #3 is an equivalently critical point of note, where one of the only ways to get your money out of Bitfinex, which is collapsing like a house of cards, is to buy Litecoin and withdraw that.
My intuition tells me they may be insolvent after the recent margin shenanigans during the crash flash margin dump, but they have ample Litecoin on hand.
This is leading to a situation where Litecoin is being bought up because there aren’t any other options available.
When looking at fundamentals, in a situation like this one has to consider if that advantage can be eroded by another party, and there is a sleeping dragon on the horizon.
Bitcoin Cash is the Litecoin pump's black swan. The reason is, fees can be set to 1sat/byte and it’s always producing 6 blocks an hour.
This is considerably cheaper than Litecoin, and as the market starts to realize it and more options become available, it may become a factor with the price.
With Bitstamp having introduced BCH trading and having 0% fees until the end of the month, I think the Bitfinex and Coinbase issues are the greatest contributors to the price.
Case in point right from the horse’s mouth:
What the causation tells us is that from the perspective of an investor, we should be cautious here and should even consider, once Litecoin finds a proper top, about taking profits on a percentage of our core position.
From the perspective of a day trader, the direction of trade is clearly long and we should be looking for an entry point, take profit levels, stops, and ultimately a clear topping/reversal pattern.
From the perspective of an investor, there are certain concerns with Litecoin. One is the distribution of total coins is extremely centralized.
Now before you think to yourself "duh, it's exchanges", let's take a look at other coins for comparison.
Bitcoin Legacy (BTFee™)
Just this example alone shows a lot.
Bitcoin Legacy - Top 110 addresses control 17.75% of total coins
Litecoin - Top 72 addresses control 43.86% of total coins
I think TradingView's Goldbug1 said it best when it comes to Litecoin overall, as a lot of its argument is its "Bitcoin Improved".
I think many misunderstand that market penetration, and market share is more important than being the better coin. It's like saying well Atlanta was the better team last year and shoulda won the super bowl. Shoulda woulda coulda! I can give examples of products of lesser quality that gained market share from marketing and crushed the others into being obsolete. Word perfect, Beta players several computer gui interfaces, router companies and chip manufacturer's all succumbed to the likes of Windows, Cisco, Intel, and the list goes on! Most may not even remember the competitors to these marketing geniuses, but this is because they marketed, gained market share, and once that happens the competition even with a better product becomes, well, the past! Hmmm this is why Apple crushed Blackberry!
He's right. Litecoin does not have people's hearts. People are interested in the coin when it starts to pump, but only because it's pumping.
Much attention comes to Litecoin about Lightning Network and atomic swaps, but I have to caution investors about being excited for this for two reasons.
- Bitcoin Cash and Litecoin Have Atomic Swaps Too. It's not Exclusive to BTFee™
2. Lightning Network™ is Not Something to be Excited For (Have You Read the Whitepaper?)
Most importantly, Charlie Lee, who should be spending his efforts and energy on promoting Litecoin and having it gain ground, gain market share, and capitalize on the opportunity presented by BTFee™, is instead constantly ignoring the coin and shilling for Bitcoin Legacy, even while Litecoin pumps.
Don't you think it's curious? For myself, this is why I hold zero Litecoin as a core holding. During major market correction, this coin is an anvil filled elevator down.
For daytraders, this means you should be playing the pump and dodging the dump.
After the paywall will be a trade structure thread for Litecoin. These have been well received. My last, Bitcoin Cash - Be Greedy When Others are Fearful, has scored a 91.67% approval rating. I'm grateful to the community for their kindness and support.
I'm going to do this one at a discount price of $5.88 to welcome members of the Litecoin community to my posts and to Yours.org!
In this post there will be:
- More fundamental analysis and news on recent events. Cumulatively, I put in between 3-6 hours of work just into the creation of each post
- Trade structure, strategies, stops, and targets
- Multiple updates as price action progresses.
Average trade structure post so far has gone on for 24-48 hours and has had ~10+ updates provided along the way.
Stop the Organ Harvesting Persecution of Falun Gong Practitioners by the Chinese Communist Party
9 of 9 reviewers say it's worth paying for
0 of 9 reviewers say it's not worth paying for