A last minute segwit deal between the Litecoin creator and miners lead to a surge in LTC prices. Bitcoin did okay too, up by $31 dollars or 2.5 percent since last Tuesday.
Litecoin Surges on Segwit Deal
The Litecoin creator and Charlie Lee and holdout miners reached a compromise deal on April 22nd. According to the circulated announcement, the miners will signal segwit in exchange for a ‘bigger blocks’ solution. The bigger blocks fix will happen when they are over 50% full, which is probably many years in the future. Most LTC blocks are currently well below the 1 MB maximum.
From a fundamental perspective, it’s not clear for a cryptocurrency trader that the segwit upgrade by itself justifies the nearly five-fold increase in prices during the past month. The main ‘selling point’ of segwit is the smaller footprint, which frees up space for more transactions. But unlike Bitcoin where blocks are frequently full, this almost never happens on Litecoin. In addition, the 2.5-minute blocks (compared to 10 minutes for BTC) theoretically allows for 4 times as many LTC transactions during the same timeframe.
Prices hit a high of $13.98 on the day of the deal and continued to rise slowly in the next few days. Two days ago a new high of $15.87 was reached. We are currently quoted at $14.62 dollars per coin. While fundamentally the reasons for the rally seem spurious, technically we’re still in an uptrend. To end it, the bears will have to push LTC/USD below the $10 round figure. The longer-term weekly and monthly charts remain bullish.
Bitcoin Inches Higher
More gains for bitcoin this week as prices inched higher from $1,214 to $1,245. A large part of the pulling higher could be to on-going withdrawal problems at Bitfinex. The troubled exchange is quoting prices at $1,348 dollars right now. This compares to $1,245 on Fxopen or $1,254 on Bitstamp. The gap has grown from $70 last week to an average of $100 right now. As of now, Bitfinex fiat withdrawals remain largely unavailable, although the exchange is working on an ‘innovative’ one-off solution to dispense funds.
Similarly to LTC, the current bitcoin rally seems to be built on shaky foundations. But you can’t argue with the charts. The trend is up and it will remain so until we get a decisive breakdown below $1,160 dollars per coin. A move below the $1,100 round figure would switch the current trend from bullish to bearish. On the long-term charts (weekly and monthly) BTC/USD is pointing upward as well.