Yesterday, Litecoin (LTC) by as much as 23% in less than 24 hours, peaking at $21.10- its highest level and greatest gain since the start of 2014. Buyers piled in, expecting a huge pop in LTC prices as excitement mounted in anticipation of Huobi's launch of Litecoin trading.
The party was short lived. In what traders are calling a massive dump, LTC has given up pretty much all of its gains, now trading at $17.50 and falling. What's more is that its fall back to earth has been sharper and faster than its ascent, transpiring over a mere 10 hours.
Volume during the decline has been astronomical, peaking at over 150,000 LTC ($2.7 million) per hour on BTC-e. This outpaces volume observed during the ascent, which is consistent with its transpiring over a far more concentrated period.
The market is correct, as it often is. There is fundamentally no reason why a coin's addition to an Exchange should increase its value, especially if it's already available for trading and purchase in multiple other venues. When made available for trading, people can sell such as much as they can buy. Has anyone heard of a coin tumbling in value after getting slated for launch on an exchange, with holders looking for an avenue to dump their hated coin? (Although the Facebook IPO does come to mind.)
Several other high-profile coins have been added to exchanges or burst into existence over the previous months. Many exhibited some pop as such news came out. But in all cases, the coins returned to earth, although not with the same ferocity seen here.
In terms of pure technicals, the drop to correlate well with Fibonacci extensions showing where traders are choosing to exit their positions and take profits.
Many short term traders who missed out on selling earlier are lamenting their inaction. Others remain more faithful, with one emphatically declaring, "Whales can pump and dump on us all they want, but no one can argue that Huobi taking on Litecoin as the only other crypto besides Bitcoin is a huge long-term boon."
