Litecoin prices recovered today, pushing higher after suffering a sharp decline earlier this week.
The alternative protocol asset’s (altcoin) price rose to $216.13 today, according to CoinMarketCap.
At this level, it was up more than 17% from the weekly low of $184.07 it reached the day before, additional CoinMarketCap figures show.
Litecoin’s upward movement coincided with a broader recovery in cryptocurrencies, which saw the total market value of these digital assets climb more than 10% in less than 24 hours.
[Ed. note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Buy The Dip
When explaining the recent rally in cryptocurrencies, several analysts cited market participants buying the dip, claiming that these same traders had also fueled the recent sell-off through profit taking.
We often see significant price fluctuations when “people take profit and then other investors will buy the dip,” said Milan Koch, founder and managing partner at alphablock, a crypto-asset hedge fund focused on ICOs.
After assets decline in value, “long term investors see the opportunity,” said Charles Thorngren, CEO of Noble Alternative Investments.
Ryan Rabaglia, head trader for Octagon Strategy, also spoke to this behavior, emphasizing that:
“There will always be traders buying the dip.”
Crypto Market Headwinds
Going forward, the broader cryptocurrency market could face some short-term headwinds, analysts warned.
Digital currencies are “still in a recovery phase following the broader sell-off we had earlier this month,” and recent declines in values have helped fuel bearish sentiment, said Rabaglia.
“As for the space in general, we’re seeing continual pressure, even through rebounds,” he asserted.
Further, cryptocurrencies have been suffering from a lack of fiat inflows, claimed Marius Rupsys, a digital currency trader.
Some large exchanges are still refusing to onboard new customers, which helps limit up the upside of digital currencies, he said.
Disclosure: I own some Bitcoin, Bitcoin Cash and Ether.Follow me on Twitter for cryptocurrency trade suggestions: