Litecoin (LTC) investors are still too optimistic about the upcoming halvening event in August. However, what most of them do not realize is that a lot could happen between now and August. It is clear that this hype cycle has run too far and LTC/USD has profited enormously off it. To be more precise, the whales that orchestrated this rally likely profited off the most because they just pumped the price at each point and the overly excited retail bulls took it from there. The daily chart for LTC/USD shows the kind of growth we have seen during the past few months. There is a big pump which is followed by some sideways movement and a decline that is then followed by more sideways movement and eventually another pump. This kind of movement is a testament to the manipulation rampant in this market and as long as this happen, any chances of a trend reversal are close to zero.
We have seen the Litecoin (LTC) hype take the market by storm. In fact, LTC/USD was audacious enough to show Bitcoin (BTC) the way at certain times during the recent frenzy. Now, there is no need to lose track of the big picture and think that Litecoin (LTC) is going to zero from here because that is not going to be the case. It is important to realize that LTC/USD is down almost 80% from its all-time high which would be a big deal for any financial asset, but unfortunately not for cryptocurrencies. No matter how bad things get in this market, they can get worse. This is because like it or not, most cryptocurrencies do not have any intrinsic value. They are valuated based on the interest around the cryptocurrency and the loyalty of the community, nothing more.
When something does not have intrinsic value, you are the mercy of the community as far as the valuation of that asset is concerned. So, if the community begins to think that maybe Litecoin (LTC) could fall further or if it is made to believe that, then the price falls further. This is not like commodities or stocks that have intrinsic value. Even Bitcoin (BTC) has intrinsic value that it derives from its network use and the cost of mine one Bitcoin (BTC).
Now, one might argue that it costs to mine one Litecoin (LTC) too, but then it costs to mine one Bitcoin Private (BTCP) too or one Bitcoin Cash (BCH) too. So, where does it all end? Litecoin (LTC) has found support at the trend line resistance turned support against Bitcoin (BTC). The price is now trading at a crucial support, which if broken will push Litecoin (LTC) into a world of trouble. Considering that BTC/USD is due for a sharp decline in the near future, we can expect that this strong LTC/BTC support will be broken too and Litecoin (LTC) like most other cryptocurrencies will be in free fall when that happens.