HOW TO TRADE LITECOIN IN 2021
Before you even considerhowyou can trade Litecoin, first you need to consider if youshould trade Litecoin!
So… should I?
Litecoin was one of the first altcoins (an altcoin is any other cryptocurrency apart from the King itself, Bitcoin) ever launched and made its debut in 2011. It wasn’t until 2013 however that it gained traction with crypto investors and started trading around the $3 mark. Litecoin was eventually listed by Coinbase in 2017, which saw its price skyrocket to record highs of over $370. At the time of writing, Litecoin trades around $60, so, like all cryptocurrencies it has seen its fair share of volatility, which of course, is great news for price speculators.
We love a checklist, and so far, Litecoin is checking all our boxes:
Established coin? Check.
Plenty of market data? Check.
Ample price movement to create lots of trading opportunities? Double Check.
It’s official. Litecoin is a great asset for you to trade, so now let us look at how to trade it.
There are two ways:
One would be to buy and hold (HODL!) Litecoin on an exchange. Most likely you would do this if you are looking for a longer-term investment and you are only interested in the price going up.
You’ve seen how the price of Litecoin has not only risen over the years, but it has also experienced massive drops in between. You need a way of trading Litecoin that allows you to profit from the falls, as well as the gains in value.
Trading CFDs with CryptoAltum allows you to do just that. CFD (Contract for Difference) trading is based on price speculation only. In short, you are essentially taking a bet on whether the price of Litecoin will go up or down. If you think the price will go up, you will ‘buy’ and take a profit. If you think the price will go down, you will ‘sell’ and take a profit.
Now we’re talking.
So we’ve now established that we should trade Litecoin, and the way we should do this is by trading Litecoin CFDs with CryptoAltum.
Next step: Which way is the price going to move?
The million-dollar question.
Although there are no guarantees when trading, there are some steps you can take to predict which way the price will move, at least to some degree of accuracy.
Firstly, you need to know what moves the price of Litecoin, so you can monitor the news for relevant releases. This is known as Fundamental Analysis. Luckily for you, our research team have done the leg work and compiled the following list of points you should be monitoring:
The price of Bitcoin
If Bitcoin is digital gold, then Litecoin is digital silver, and there is certainly a correlation between the pricing trends of both. If Bitcoin is experiencing a rally, it could be time to have a wager on Litecoin too. Conversely, if the Bitcoin price is falling, it’s likely Litecoin will be following.
Corporate adoption, such as PayPal’s announcement it will offer cryptocurrencies (including Litecoin) as a method of payment means increased investor confidence, which naturally increases the value.
Staying ahead of the game in terms of technological advances is crucial for any cryptocurrency to survive. Litecoin is the largest cryptocurrency by market cap to introduce privacy features. Upgrades such as this are always likely to push an increase in value.
Cryptocurrencies are a popular target for hackers and Litecoin is no exception. Any widely reported hacks could signal a decrease in investor confidence, in turn having a negative effect on value.
With Litecoin being grouped within the top altcoins, its value is also linked to the crypto market sentiment in general. If the press is full of positive crypto news, chances are prices will be soaring but if things are looking glum across the board, the price of Litecoin will likely reflect this also.
Keep your eye on the market capitalisation of Litecoin. An increase in market cap is likely to draw the attention of investors looking to buy and hold, therefore driving the price up.
This list is not exhaustive of course, but its a great place to start if you are considering trading Litecoin.
Secondly, you need to watch the Litecoin price chart, and look for any patterns that indicate clear buy or sell signals. This process is called Technical Analysis. Don’t be daunted by the seemingly complicated nature of technical analysis, just start by learning a few of the simpler indicators and you’ll be a budding expert in no time. Our easy to understand articles on Moving Averages, Bollinger Bands and the Relative Strength Index (RSI) will help you get started.
Once you have your fundamentals and technicals covered, it’s time to get trading. For this, of course you need a trading platform. If you haven’t already, sign up here and you can be up and trading in minutes.
The CryptoAltum MT5 Trading platform is a super user-friendly platform making it easy for you to monitor charts and enter and exit trades easily. If you’re unsure of the logistics of actually opening and closing trades, we’ve got you covered in our 6 Steps of the Trading Process article, which will take you through the process from start to finish.
Time to wrap up!
Ever since its launch Litecoin has consistently been listed in the top 10 cryptocurrencies in terms of market cap. This puts it up there with Bitcoin, Ethereum and Ripple and cements Litecoin as part of the cryptocurrency furniture, making it a sound cryptocurrency to trade.
Make sure you keep up to date with relevant news releases (subscribing to a top news feed such as feedspot is highly recommended) and always keep an eye on the price chart for any obvious signs of concern/opportunity and you’re good to go.
Remember CryptoAltum offers a risk-free demo account to all traders who want to test out their trading skills before taking it live.
Learning is Key!