Litecoin price dips 4%, threatens to break multi-week range

  • Upgrade 2.0 is designed to improve the cryptocurrency’s scalability and privacy, confirms Charlie Lee
  • “Litecoin has worked flawlessly over the past 9 years,” says Lee
  • LTC dipped 3.5% lower to close below the 100-DMA

Litecoin (LTC) is trading nearly 3.5% lower on the day as the crypto market slides lower on fears that a major COVID-19 outbreak isn’t over. Separately, Litecoin devs continue their work on a Litecoin 2.0 upgrade.

Fundamental analysis: Litecoin 2.0 aims to improve scalability

Charlie Lee, Litecoin’s creator, said that the 2.0 upgrade is designed to improve the cryptocurrency’s scalability and privacy. The upcoming upgrade, named MimbleWimble, will make Litecoin significantly more scalable than other similar protocols such as Monero and Z-Cash. 

“It does privacy and scare very well compared to other implementations”, he said.

Lee also made comments on potential risks, highlighting hidden inflation which is a typical bug that affects privacy coins and provides hackers with an opportunity to forge unlimited coins. 

However, he said that the risk should be manageable as the privacy update will affect only the MimbleWimble extension block and not the cryptocurrency’s main layer. 

According to Lee, Litecoin could benefit from it being characterized as “boring” because “build fast and break things” is not a suitable approach for financial assets. Last month, Litecoin Foundation entered into a partnership with Atari that will enable LTC to become a payment option for Atari’s products.

“You want money to be stable and you want it to work. Litecoin has worked flawlessly over the past 9 years.”

Mimblewimble is meant to enhance Litecoin’s scalability, fungibility and privacy. Its name comes from a tongue-tying curse in Harry Potter movies that keeps a person from talking about a particular subject. 

The update incorporates a blinding factor that ciphers the transaction using transaction participants’ public and private keys. This factor changes the addresses and only the sender and the receiver know the parties involved. 

Lee noted that since he’s a “benevolent dictator” over the Litecoin protocol, the digital currency will receive upgrades more effectively than Bitcoin. 

“It takes forever to get anything implemented on Bitcoin because consensus is slow […] With Litecoin if we want to do something we can move pretty fast on it.”

He also pointed out that he will step down from Litecoin somewhere in the future. As the cryptocurrency gets more exposure over time, there’s less reason for him to stay.

Technical analysis: Litecoin follows Bitcoin lower

Litecoin price has slipped around 3.5% today to follow Bitcoin and other major digital assets in taking a step lower. The number of COVID-19 infections has risen in the past couple of days, which pushed the stock market lower today. In line with a trend since February, the crypto market tends to move lower in a risk-off sentiment. 

Litecoin (LTC/USD) daily chart (TradingView)

The price action is now likely to close below the 100-DMA, which is likely to invite more selling pressure. As seen in the chart, the sellers are also threatening to break below the triangle’s supporting line around the $42 mark. Trades looking to invest in Litecoin should look at $39.50 as one of the levels that offer an attractive risk-return ratio.

Summary

Litecoin price dipped almost 4% today to follow the rest of the crypto market on a trip lower. Separately, Litecoin’s creator confirmed that 2.0 upgrade is designed to improve the cryptocurrency’s scalability and privacy.