Litecoin (LTC) uncorrelated with Coronavirus (COVID-19)
It is often suggested that Coronavirus (i.e., COVID-19) is associated with increases or decreases in cryptocurrencies. As we know from my previous article, Bitcoin (BTC) is not significantly correlated to Coronavirus in terms of daily percent change (i.e., Bitcoin closing price versus new confirmed cases, respectively). This time around, I was curious to see what the relationship between Litecoin and Coronavirus was like. In this article, I briefly discuss the results of the correlation I ran, an extra correlation on new confirmed Coronavirus cases versus new recovered cases, and then review the technical analysis of Litecoin on a daily chart.
New confirmed Coronavirus (COVID-19) cases.
Just like with Bitcoin (BTC), Litecoin' (LTC) daily percent change in closing price is not correlated with daily new confirmed cases of Coronavirus (COVID-19), r(42) = .024, p = .878. Litecoin and Coronavirus only have a correlation of .024 and a coefficient of determination of R^2 = .06%. Not only is the correlation very weak, it is insignificant. This suggests that daily new cases of Coronavirus are unrelated to Litecoin's price.
I will add here an additional correlation I ran that is unrelated to Litecoin but is an interesting piece of information for everyone to have. In the chart above, we are given two pieces of information: New confirmed cases and new recovered cases. I could not help but notice that as time is going on, we are seeing a steady rate of new confirmed cases; but we also see an increasing number of new recovered cases. This is what I ran the correlation on: New confirmed cases versus new recovered cases. Rather than using the raw data though, I used the daily percent change. According to the results, the daily percent change of new recovered cases is significantly correlated to the daily percent change in new confirmed cases, r(32) = .511, p < .01. In other words, this suggests that as the daily number of new confirmed cases of Coronavirus increases, the number of new recovered cases is also increasing.
LTC-USD, 1D, BTSE
Litecoin (LTC) looks like it has hit a support zone after its recent retracement. Price broke down past the 20-day moving average (MA; red) and tried to stay above it between February 19th and 25th. Price then broke straight past the 50-day MA (orange) and is now holding at the 200-day MA (green). This is a nice little support zone, with the 100-day MA (yellow) also below it. Regarding the 10-day exponential moving average (EMA), price has touched it. It appears that volatility is starting to settle. However, price is still below it, which could act as a form of resistance (i.e., $62.81).
Moving averages and exponential moving average
According to the Bollinger Bands (BB), Litecoin (LTC) has settled out for now. Price has stopped riding the lower BB and is now approaching the middle band (aka the 20-day MA). The middle band may also act as a form of resistance (i.e., $67.31).
Fibonancci retracement levels also suggest that Litcoin (LTC) has found a level of support at the 50% retracement area (i.e., $60.14). This the second piece of evidence that Litecoin coin has indeed found an area of support. However, price also faces resistance at the 38.2% retracement area at $65.85. Let's now look at some indicators.
The Chaikin Money Flow (CMF) has been agoing down and broke past the zero line. However, it is now slightly above the zero line and is pointing upwards. Given that volatility has reduced and Litecoin (LTC) has found some level of support, the CMF is starting to look bullish.
Chaikin Money Flow
Like the CMF, the On Balance Volume has also been declining. However, the OBV has made a shape bounce and is pointing upwards. I would like to see OBV move past the previous peak that occurred on March 2nd, 2020.
On Balance Volume
In conjunction with the CMF and OBV, the MACD is also starting to look bullish. The MACD line (blue) is bottoming out and is starting to point upwards towards the signal line (red). Taken together with the CMF and OBV, Litecoin is looking bullish in the near term.
After about a -33% decrease from the high of February 13th, 2020 to the recent low, Litecoin (LTC) has increased about 12% to its current price of $62.61. This makes a total loss of about -26% from the high in 2020. Litecoin has found 2 levels of support, including: the 200-day MA and the 50% Fibonacci retracement level. Additionally, the MACD, CMF, and OBV are all starting to turn bullish. Litecoin could be in for a rally in the coming days. I would like to see how things play out in the coming days. To confirm I would like each indicator making lhigher lows and higher highs. This goes for price too. I would like price to break above the 10-EMA and the 20-day MA as additional levels of support.
BTSE regularly hosts the technical analysis of experienced BTSE traders. Please note that we neither endorse any analyses published nor give you financial advice. Please make any trading decisions based on your own research.
Our aim is to create a platform that offers you the most enjoyable trading experience. If you have questions or suggestions, please don’t hesitate to reach out to us at firstname.lastname@example.org or DM us on Twitter: @BTSEcom.