Is Litecoin Pumping a Good Sign for Crypto Prices or Bad

BlackRock Secures Abu Dhabi License to Expand Middle Eastern Presence

6 Best Cheap Crypto to Buy Now Under 1 Dollar November 18 – Degen, Holo, Casper, Bonk

Join Our Telegram channel to stay up to date on breaking news coverage

The crypto market is experiencing its first rally in over a month. This is good news for investors, but there are still some questions as to whether Litecoin’s recent surge is just a pump-and-dump scheme or if it’s actually indicative of future price increases. Let’s look at the situation and see if this new price jump is worth getting excited about!

Current Market Trend

Litecoin (LTC) is currently the second-largest cryptocurrency by market capitalisation. However, it has been trading at a discount to its all-time high and at a premium to its all-time low.

In other words, Litecoin has not been pumping like Bitcoin or Ethereum.

It is also interesting to note that, unlike Bitcoin and Ethereum which are in bearish trends, Litecoin is in an ascending channel with bullish price action over the past few days, even while they remain in their respective downtrends.

The cryptocurrency Litecoin jumped by over 35 per cent Wednesday, bringing the per-token value of the coin to $78.5 at the time of writing, according to CoinMarketCap.

This price rise was followed by an increase in demand, which pushed its trading volume to a record high for 2022, according to CoinMarketCap data.

The jump comes on the back of some positive news for Bitcoin and other cryptocurrencies earlier this week when MoneyGram announced earlier this month that it would allow users to store and trade multiple cryptocurrencies on its app.

The rising demand caused the altcoin to see record volumes, with over $2 billion in LTC trading volume being recorded within the span of 24 hours, according to data provided by CoinMarketCap.

According to crypto influencer Muro, this pumping is a good sign for the crypto market and indicates bullish behaviour for the BTC market. Historic data has shown that pumping at the lows, especially in the case of LTC has a positive outlook on the crypto market. Not only for LTC but also for BTC and ETH. Muro is of the strong opinion that BTC will show a strong bull run before going into a long period of a sideway run until the next halving cycle.

Crypto influencer Mayne supports the same theory encouraging users to buy in the current pump cycle. According to his prediction pumps like these have almost always shown a positive trend for the market. And such pumps generally always bring good profits for everyone who invests during the pump cycle.

On the contrary, influencer Cytpo Chase doesn’t support the theory. Following historic data, he believes that when big players like LTC pump up the price, it doesn’t end well. We have seen plenty of times in the past, big players using pump-and-dump schemes to influence the behaviour of innocent users.

Because pump-and-dump scams target inexperienced investors who may not be aware that they’re putting their money into something illegal, it’s important for you to educate yourself on pump-and-dump schemes so you don’t fall prey to them.

You may have heard of pump and dump schemes, but you may not know exactly what they are. The perpetrators of pump and dumps are usually unscrupulous traders or boards of directors looking to boost their share prices so they can sell them for a higher price to unsuspecting investors. The scammers may send out emails to certain lists that include tips about the hot new stock. They may also post on message boards similar tips or rumours or other news that will supposedly drive up the coin’s price.

When an investor buys high-priced coins expecting them to rise further, it’s easy for them to lose money if the stock doesn’t perform as expected because there is no guarantee that it will go up in value.

The key to avoiding these scams is being sceptical about any advice you get from an unknown source, especially if you hear it through email or on a message board. If you hear a tip about an unknown stock, do your own research on the company before investing your money.

Crypto influencer DonAlt supports this theory with his tweet that LTC is known for pumping at the tops of bullish markets and at the bottoms of bearish markets.

The first pump happened in 2011, shortly after Litecoin’s launch. A group of early adopters bought up a bunch of LTC and then promoted it heavily on forums and social media. The price went from $0.30 to $1.30 in just a few days. The second pump happened in 2013, during the famous Mt. Gox scandal. At the time, Mt. Gox was the largest Bitcoin exchange and handled the majority of Bitcoin trades. Due to some shady business practices, Mt. Gox ended up losing 850,000 Bitcoins (worth over $450 million at the time).

As the news of Mt. Gox’s problems started to spread, people started selling their Bitcoins for other cryptocurrencies like Litecoin. This caused the price of Litecoin to go from $4 to $50 in just a few days. Again, those who were late to the party were left holding the bag when the price eventually crashed back down to its pre-pump levels. The third and most recent pump happened in 2016, during the DAO hack. The DAO was a decentralized autonomous organization built on top of the Ethereum blockchain. It was meant to be a way for people to invest in Ethereum-based projects without having to trust a centralized entity.

Unfortunately, someone figured out how to exploit a flaw in the DAO’s code and drained about 3.6 million ETH (worth around $50 million at the time) into a child DAO. This caused a lot of panic among Ethereum investors and many sold their ETH for other cryptocurrencies like Litecoin. Litecoin’s price shot up from $1 to $11 in just a few days as a result of this panic selling. Once again, those who were late to the party were stuck holding LTC when the price eventually crashed back down.

So why is Litecoin still vulnerable to pump-and-dump schemes? Well, for one, Litecoin has always had relatively low liquidity compared to other major cryptocurrencies like Bitcoin and Ethereum. This means that it doesn’t take much buying pressure to drive up the price of LTC. Secondly, Litecoin’s price is still highly volatile compared to most traditional assets like stocks or bonds. This makes it more attractive to traders looking for quick profits, which increases the chances that a pump-and-dump scheme will be successful. Finally, Litecoin’s history of being involved in major pumps makes it more likely that people will fall for future scams. After all, if you’ve been burned by a pump-and-dump once, you’re more likely to fall for it again if you’re not careful

Conclusion

The next time you see a price jump like this, it could be a good sign for cryptocurrency prices. But we can’t really say for sure what it holds for you in the long run. If Litecoin continues to pump, it will likely have an effect on other major cryptocurrencies like Bitcoin and Ethereum as well.

Only time will tell whether this is another one of those pump-and-dump schemes or an actual resurgence of the crypto market.

However, in order to deal with such an uncertain time, it is better to invest in a cryptocurrency that arms you with the knowledge to make better investment decisions. Such a facility is provided by Dash 2 Trade, a crypto analytics platform with a difference. The token is currently in the presale phase and has raised upwards of $7 million at the time of writing. Join the presale to get this asset at a discounted price.