Litecoin prices declined in September, enjoying notable gains earlier in the month and then falling sharply as traders sold off the altcoin (cryptocurrency other than bitcoin).
The digital currency, which is very similar to its digital sibling bitcoin, climbed to nearly $80 on September 18, up more than 22% since the start of the month, before falling roughly 35% from that point to $51.84 on September 26, CoinMarketCap data shows.
The cryptocurrency, which has frequently been called the silver to bitcoin’s gold, then recovered, bring September’s monthly loss to 12.4%, additional CoinMarketCap figures reveal.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
The digital asset suffered some declines last month, after rallying more than 500% between December 2018 and June 2019.
Litecoin prices rose ahead of the halving in August, during which the rate of new supply of the digital currency was reduced by 50%.
Following this event, the cryptocurrency failed to rally in price, which may have helped precipitate notable losses in the subsequent weeks.
“After a meteoric rise in value this year, Litcoin has been consolidating in recent months due to profit-taking and the generally poor performance of crypto assets since July,” said Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital.
In addition, the digital currency markets suffered a “huge sell off” toward the end of September, which “caused a lot of people to dump a lot of tokens at that exact time,” said Tim Enneking, managing director of Digital Capital Management.
Litecoin was “crushed” in this sell-off, which “affected every major token in the space,” he stated.
The sentiment surrounding litecoin fluctuated significantly during the month, according to data provided by cryptocurrency analytics platform TheTIE.io.
“Litecoin daily sentiment had been extremely positive, peaking on September 10th and remaining positive throughout Litecoin’s recent run-up,” said Joshua Frank, cofounder of TheTIE.io.
“Sentiment began to drop negative on the 22nd of September coinciding with the start of massive downwards price movement. Since the 25th sentiment has seen a slight rebound.”
This chart helps illustrate these changes:
“We have also seen tweet volumes on Litecoin drop to the lowest levels that we had ever recorded at the end of September,” stated Frank.
“Overall tweet volumes are down over 86% from their peak in January 2018,” he noted.
“This does not paint a rosy outlook for the coin as it signifies that retail interest in the asset is declining significantly.”
The chart below helps depict this activity:
However, Frank added that many major digital currencies are suffering similar problems, noting that for the most part, their long-term sentiment has been declining since August.
“Among the largest cryptocurrencies by market cap, sentiment on Bitcoin and EOS remain the highest,” he noted.
“Litecoin long-term sentiment has seen by far the biggest drop off,” Frank emphasized.
The chart below helps show these developments:
Many have voiced their doubts about litecoin development in recent months.
“People are definitely concerned about the development,” said Marouane Garcon, managing director of crypto-to-crypto derivatives platform Amulet.
“[Litecoin] doesn’t have the luster of an Ethereum which continues to update and improve at a much faster pace, and with the introduction of DeFi it is a lock-in at number two. Their development is the biggest question mark surrounding Litecoin.”
Evan Kuo, CEO and cofounder of digital currency firm Ampleforth, also weighed in.
“The project is perceived as abandoned,” he stated.
However, Kuo emphasized that for litecoin, a “purely monetary instrument,” “only a small amount of maintenance is required.”
Even so, that ongoing work is “still necessary,” he noted.
“By comparison if aspirational platforms like Ethereum had ghost-town like repos that would be more concerning,” stressed Kuo.
People ‘Losing Interest’ In Litecoin
“Litecoin is essentially a lighter version of Bitcoin, with lower transaction fees and faster confirmation times,” noted DiPasquale.
“Over the years, Litecoin’s utility was due to Bitcoin’s shortcomings, and naturally, as Bitcoin improves, Litecoin becomes less relevant,” he asserted.
“Add to this the fact that development has been slow and mining reward has been halved this year – people are losing interest in LTC,” claimed DiPasquale.
Litecoin has suffered some perceived setbacks lately, but it is still one of the top digital currencies by market value, repeatedly ranking in the top 10 on CoinMarketCap.
“Litecoin has certainly done better than most cryptocurrencies and is still in the elite class,” said Garcon.
The altcoin, one of the original forks of bitcoin, has been in existence since 2011, giving it greater tenure than the majority of digital currencies.
“Ultimately, Litecoin’s future will depend on how fast the Litecoin Foundation manages to forge new, game-changing partnerships alongside showing development progress for MimbleWimble and Confidential Transactions,” said DiPasquale.
Further, the altcoin will need to differentiate itself, he stated.
“Litecoin needs to be able to stand on its own and distinguish itself from Bitcoin in order to survive in the long run.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.