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Led By Litecoin, Mid-Cap Altcoins Bleed With Bitcoin

Litecoin awoke from a month-long slumber to follow the general sentiment in the market. The price of LTC broke above the $200 resistance, only to drop with the crypto market flash crash.

At the time of writing, Litecoin trades at $181 with a 17.31% loss in the daily chart.

LTC is on a downtrend in the daily chart. Source: LTCUSDT Tradingview

The market seems to be reacting to the events triggered by El Salvador making Bitcoin legal tender. Whales could have used the bullish sentiment to push down the prices, triggered liquidations, and entered new positions.

Despite the crash, Analyst Ali Martinez believes Litecoin could reclaim its bullish momentum. Since the beginning of August, the number of unique addresses that joined the network reached a higher high, the analyst said.

As seen below, this metric stood at 220,000 new addresses created on September 6th alone. The Number of New Addresses from Glassnode is useful to measure the number of users with fresh capital coming into LTC and “could be interpreted as a sign of optimism”, Martinez said.

Source: Glassnode via Ali Martinez

In addition, large investors went on a “buying spree” with the number of addresses holding 10,000 to 100,000 adding over 720,000 LTC in the past 30-months. This coincides with the increase in the price of Litecoin, as seen below.

Source: Santiment via Ali Martinez

Further data provided by IntoTheBlock records around 170,000 addresses that bought 3 million Litecoin when the price was at $222. Martinez believes this is the next major resistance, LTC’s price must recover and rise above it to push into previous highs.

Support is bigger than resistance in terms of volume. Still, prices must slice through $222 to advance further.

Litecoin, Solana, Polkadot, Follow The Bearish Trend

Almost no altcoin in the top 20 by market cap has been able to hold its gains. Litecoin is one of the worst-performing in the past day, followed by Internet Computer (ICP) with a 23% loss, Polkadot (DOT) with a 17.3% loss, Cardano (ADA) with a 16.6% loss.

Related Reading | New To Bitcoin? Learn To Trade Crypto With The NewsBTC Trading Course

These altcoins have shown resilience to previous downside trends. Only Solana (SOL) records a 10.7% profit in the daily chart on the back of the growth of its ecosystem.

In the short term, Bitcoin could determine the fate of the entire market. Litecoin displays solid fundamentals for a recovery, but BTC losing key support at $43,000, could potentially trigger another leg down to its previous range around the high levels of $30,000.

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How Chainlink will help secure Polkadot’s environment

Polkadot has integrated with Chainlink to incorporate its oracle service into its multi-chain environment. Thus, the different teams building on Polkadot will be able to count on a “flexible and reliable” solution to feed parachains with information.

Chainlink Price Feeds have been enabled as a Substrate Oracle pallet and can be accessed by any other pallet integrated into a parachain. Thus, deployable applications will have “powerful new functionality”.  According to a release from Polkadot’s team:

Chainlink Price Feeds will allow smart contract applications across the Polkadot ecosystem to access accurate, up-to-date and tamper-proof price reference data for powering new products and markets

Chainlink to power DApps on Polkadot

Parachains based on the Substrate network will have a direct connection to the “outside world” information provided by Chainlink via a runtime module. The pallet may be added with supported smart contract programming languages, before or after connecting it to the Chain Relay. Polkadot’s team states:

Either of these approaches allow developers to leverage Chainlink Price Feeds with limited technical effort. This integration supports the many smart contract applications and parachain pallets requesting access to Chainlink Price Feeds across Polkadot’s environment.

Additionally, a standard will be worked on to allow the use of the data feeds in all Polkadot parachains. The focus will be on an easy integration to leverage Chainlink’s 4 main features: high-quality data, decentralized infrastructure, secure nodes, cost-efficiency.

Apps connecting to Chainlink’s pallet will be able to add a collection of on-chain data sets for cryptocurrencies, FX rates, commodities, and other assets.

In addition, applications will have multiple functions such as settling cross-chain smart contracts, operating liquidation mechanisms, confirming the authenticity of reserves that collateralize a stablecoin, among others.

Head of Public Affairs at Parity Technologies, Peter Mauric believes that with this integration, Polkadot developers will be able to build the “next generation of high-performance decentralized applications”. Daniel Kochis, Head of Chainlink Business Development said:

We’re excited to empower developers across all parachains by providing them with a standardized, easy to integrate oracle solution for access to a wide range of high-quality, time-tested on-chain price feeds. By doing so, we can rapidly accelerate DeFi development within the Polkadot ecosystem, while maintaining the highest security and data quality requirements (…).

At the time of writing, DOT is trading at $43,88 with a 10.9% gain in the 24-hour chart. In the 7-days chart, DOT records a 32.4% profit and has managed to displace Cardano (ADA) in total market cap.

Chainlink LINK Polkadot DOT
DOT with moderate gains in the 24-hour chart. Source: DOTUSDT Tradingview

On the other hand, LINK trades at $30,82 with side movement in the daily chart and a 12.3% profit in the weekly chart.

Chainlink LINK Polkadot DOT LINKUSDT
LINK showing side movement in the 24-hour chart. Source: LINKUSDT Tradingview
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Charted: Polkadot (DOT) Setting Up For Fresh Surge Above $40

Polkadot’s DOT started a fresh increase from the $28.00 support against the US Dollar. It is rising and the bulls seem to be eyeing an upside break above the $40.00 resistance

  • DOT is holding the ground above the $35.00 and $36.00 levels against the US dollar.
  • The price is trading nicely above the $35.00 support and the 100 simple moving average (4-hours).
  • There is a major bullish trend line forming with support near $35.80 on the 4-hours chart of the DOT/USD pair (data source from Kraken).
  • The pair could start a strong rally once it clears the $39.50 and $40.00 resistance levels.

Polkadot’s DOT Eyes Fresh Surge

After correcting towards $28.000, DOT started a fresh increase. It recovered above the $30.00 and $32.00 levels to move back into a positive zone.

The bulls were able to push the price above the $35.00 level and 100 simple moving average (4-hours). The recent swing low was formed near $34.83 before the price climbed above $36.00. There was a break above the 50% Fib retracement level of the downward move from the $39.53 swing high to $34.83 swing low.

The price is now trading nicely above the $37.00 level. There is also a major bullish trend line forming with support near $35.80 on the 4-hours chart of the DOT/USD pair.

Polkadot (DOT)

Source: DOTUSD on TradingView.com

An immediate resistance is near the $38.35 level. It is close to the 76.4% Fib retracement level of the downward move from the $39.53 swing high to $34.83 swing low. The main resistance is still near the $39.50 and $40.00 levels.

A successful break above $39.50 and a close above $40.00 could start a strong rally. In the stated case, the price could easily rise 10%-15% in the near term.

Dips Supported?

If DOT price fails to continue higher above $39.50 or $40.00, there could be a fresh decline. The first key support is near the $37.60 and $37.50 levels.

The next major support is near the $35.80 level and the bullish trend line. Any more losses may perhaps open the doors for a move towards the $32.00 support zone.

Technical Indicators

4-Hours MACD – The MACD for DOT/USD is now gaining momentum in the bullish zone.

4-Hours RSI (Relative Strength Index) – The RSI for DOT/USD is now above the 50 level.

Major Support Levels – $37.50, $36.00 and $35.80.

Major Resistance Levels – $38.35, $39.50 and $40.00.