Litecoin (LTC) Long-term Price Analysis

  • The two SMAs are closely moving a bit above the accumulation territory of $80
  • The bulls will have to build upon any correction that can possibly occur.

LTCUSD Long-term Trend - Bearish

Distribution territories: $100, $120, $140.

Accumulation territories: $70, $50, $30.

The bears have been significantly influencing the price of Litecoin this week. Since July 24, while the crypto’s price was above the 14-day SMA and was pushed further northbound to touch the 50-day SMA, it kept on been experiencing a series of declines. The cryptocurrency has been continually falling, and now seems to be being driven towards a low once experienced on June 28 and July 10.

Litecoin, LTCUSD, Cryptocompare chartLitecoin Chart by TradingView

The two SMAs are closely moving a bit above the accumulation territory of $80. The price has been trading below the two SMAs in the last couple of days.  The Stochastic Oscillators have crossed and moved to touch range 20, but still point south.

 This suggests the bearish trend is still in play. The crypto may need to briefly push further southwards to start recovering. However, the bulls will have to build upon any correction that can possibly occur. Investors may have to wait for an upward breakout to engage in good long entries. Traders may wait for the price to push southward a bit to initiate a buy order

The views and opinions expressed here do not reflect that of and do not constitute financial advice. Always do your own research.

Blockchain-Enabled Chinese Yuan Could Increase Governmental Oversight, Investor Argues

The Chinese government has been closely studying blockchain technology in order to determine whether the immutable distributed ledger can be used to streamline routine business processes.

However, Chinese authorities have expressed concerns regarding the use of cryptocurrencies in financing illicit activities and potentially disrupting the country’s $12 trillion economy by facilitating capital flight.

People’s Bank of China Considering Blockchain-Based Yuan

While China’s government has attempted to restrict transactions involving cryptocurrencies, the People’s Bank of China (PBoC) has reportedly been conducting research to determine the feasibility of launching a blockchain-based Chinese yuan (CNY) since 2014.

This, according to Dovey Wan, a founding partner at Primitive Ventures, a “market cycle agnostic” investment firm which has invested undisclosed amounts into various cryptoasset projects such as ZCash (ZEC) and DFINITY.

Wan, who earned her Masters in Information Systems from Carnegie Mellon University, wrote in a blog post published on CoinDesk on May 17, 2019 that the digital yuan, or Renminbi (RMB), initiative may potentially allow the Chinese government to exercise greater control over the nation’s local and international economy.

M0 Versus M2

As explained by Wan, digital fiat currencies allow financial institutions to more effectively create credit flows which increase M2, the broad money supply. Meanwhile, blockchain-based digital currencies impact a base currency measure, referred to as M0.

Blockchain-enabled digital currencies could potentially allow central banks to “bypass commercial banks” in order to directly control money creation and supply channels. This would structurally centralize the central financial institution’s power and role in formulating monetary policy, Wan argued.

Chinese Government Will Most Likely Use Permissioned Network

According to Wan, the PBoC is looking at various types of network design for a digital, blockchain-powered RMB. She believes that it will most likely be a permissioned network in which the nodes will be managed by major Chinese financial institutions, including the PBoC.

This indicates that transactions involving a digital yuan would only be seen by Chinese banks, and not the nation’s citizens.

Blockchain-Powered Currencies Enable “Better Coordination Paradigm”

One of the main reasons for using blockchain technology, Wan noted, is to take advantage of “a better coordination paradigm” when compared to “traditional currency supply management, which is heavily dependent on bookkeeping,” Wan wrote.

Moreover, Wan thinks blockchain’s immutable nature and private-key cryptography can prohibit users from entering fraudulent transactions and also prevent users from counterfeiting currency notes.

A blockchain-based yuan could also assist the Chinese government in more carefully monitoring the spending history of the nation's residents. This would allow the government to "accurately assess creditworthiness" and detect illegal activities such as money laundering and tax evasion, Wan noted.