More than the past 48 hours of trading, bitcoin has skilled one of the greatest crashes in its history. At press time bitcoin is hovering around the $ 500 mark.
The value dive was precipitated by Chinese regulators, who not too long ago moved to ban third-party payment firms from dealing with bitcoin exchanges.
The price tag began tumbling on 16th December, briefly dropping south of $ 700 and recording a 22% loss in just 24 hours.
Considering that then, it has lost an further $ 200 and earlier this morning the currency hit a low of $ 479. At press time bitcoin was trading at $ 542, 20% down from Tuesday’s close of $ 682.
Bitcoin price tag drop requires its toll on litecoin
Although some investors believed investing in litecoin would assist to broaden and stabilize their portfolio, the events of the final 24 hours seem to have verified them spectacularly wrong.
Litecoin crashed as well, virtually as if it was pegged to bitcoin, which in some sense it is.
Numerous exchanges do not offer you LTC/USD services and as a result significantly of the volume is coming from LTC/BTC trades. In other words, when bitcoin goes down, it drags litecoin down with it.
In truth, litecoin charts from the past 48 hours look like a carbon copy of their bitcoin counterparts.
In the early hours of Monday (GMT time) litecoin was trading in the higher twenties, but by the finish of the day it was going for as small as $ 22.60.
On Tuesday litecoin shed more worth, dropping to $ 18.53 before it briefly bounced up to $ 23.30, albeit on reasonably light volume.
Wednesday saw yet another tumble. Even though litecoin opened at $ 19.80 and it rapidly passed the $ 20 mark, this was as soon as once more on light volume.
However, five hours later, with volume skyrocking – the value tumbled 1st to $ 18.90 and then a low of $ 13.00 at press time.
In essence, the numbers mimic those of bitcoin, with a slight delay. Volume remains heavy, but the LTC/BTC rate is reasonably steady, in the .029 to .034 variety.
The rate is holding steady for now, indicating that litecoin is no safe haven for bitcoin investors.
How poor can it get?
Bitcoin seems to have stabilized north of $ 500, but at this point it is challenging to make any predictions.
The Chinese market is crippled, despite the fact that some exchanges are nevertheless taking deposits. It remains to be noticed regardless of whether these exchanges can remain open for business.
Judging by volume and price over the previous two days, litecoin is efficiently linked to bitcoin, so it may stabilize, provided bitcoin does not slide additional.
At press time, litecoin is bouncing back, with current trades in the $ 14-$ 15 range on six-digit volumes.
It’s also critical to note that current bitcoin warnings issued by central banks and regulators in many significant markets do not apply solely to bitcoin, they address all digital currencies including bitcoin.
In other words, even if it weren’t for the fairly stable LTC/BTC rate, moves created by regulators are bound to influence each currencies in precisely the very same way.
Litecoin Image: btckeychain / Flickr
View China News Affects Litecoin’s Price tag Also on CoinDesk.
China News Affects Litecoin’s Price tag Too
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