The cryptocurrency market has always been full of uncertainty. For crypto investors, grasping the price trend is essential for investment. No one knows exactly when prices will rise and fall. In this case, does it mean that we can do nothing when facing market changes? Like, how to predict Litecoin price?
Not necessarily. With the right analysis methods, we can learn to analyze and make our own predictions on cryptocurrency trends. In this article, we will learn several analysis methods to predict the trend of Litecoin (LTC).
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As the first decentralized cryptocurrency, the popularization of Bitcoin has promoted the growth of the crypto economy. Many crypto traders regard Bitcoin as market benchmark. Its price performance often greatly impacts the rest of other cryptocurrencies, especially in times of volatility. Litecoin claims to be “a lite version of Bitcoin“. In many cases, its price trend is deeply affected by changes in Bitcoin.
How To predict Litecoin Price & Market Adoption Of Cryptocurrency
Market adoption represents whether a cryptocurrency could be used as a store of value or not. The more widely accepted a cryptocurrency, the more promising its development prospects.
As of January 2021, more than 2,000 merchants and stores worldwide have accepted LTC as payments. In late June, Grayscale Capital increased nearly 8,500 Litecoin to their crypto investment holdings. Large investment companies usually take action with a comprehensive analysis of the market. Through the large-scale purchase of Grayscale, many crypto investors have increased their confidence in the future of Litecoin.
How To predict Litecoin Price & Technical Analysis
The cryptocurrency market is full of unknowns. However, its development trends still have some regular patterns. Technical analysis is an important tool to analyze price changes and trends. Therefore, we can use some technical indicators to predict Litecoin’s trend. Here we will list two technical indicators.
Use MACD To Predict The Trend Of Cryptocurrencies
MACD, Moving Average Convergence Divergence, is a technical tool used in crypto trading. It helps investors learn a cryptocurrency’s bullish or bearish trend, and judge a stronger or weaker cryptocurrency. By studying the intensity, direction, and trend cycle of cryptocurrency price changes, traders can find the support and resistance level. Thus, they could grasp the timing of buying and selling.
MACD is the divergence and crossover of two exponential moving averages, EMA(12) and EMA(26). It is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA. When the deviation value (DIF) crosses the signal line (DEM) from bottom to top, it shows a buy signal for the market. On the contrary, if DIF crosses from top to bottom, there might be a sell signal. Trading signals may appear frequently. Hence, investors can use other indicators, such as KD, together with MACD.
Use OBV To Predict Cryptocurrencies Market Trend
On Balance Volume is an indicator that is relatively easier for traders to watch and analyze. It mainly accumulates or deletes the market volume value based on market fluctuations. The accrued value would be an indicator of the trend of market momentum.
It is worth noting that when studying the OBV line chart, the main focus should be the trend direction of the OBV line chart, instead of the size of the OBV value itself. Because the OBV line graph value is dynamic, different starting points will lead to different OBV line graph values. However, the relative trend direction of the OBV line pattern remains unchanged in general. At the same time, to ensure the correctness of the trend judgment, the OBV line should be used in conjunction with the price graph. If there exists a deviation or a divergence between cryptocurrency price and the trend of OBV, it may be a reverse signal for the market.
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Due to the instability of cryptocurrencies, it is not easy to predict the price trend of Litecoin exactly. When the cryptocurrency market fluctuates, technical indicators may give wrong signals. And full trust in one single technical indicator often causes huge losses. Therefore, when trading Litecoin (LTC), you should carefully refer to other indicators based on market performance.