I think Charlie Lee, the Litecoin creator and former director of engineering at coinbase covered this well the other day. Check out his tweet: https://twitter.com/SatoshiLite/status/940357341723082752
Basically yeah the market is bullish at the moment, but if you look at the candles for bull runs on almost anything (crypto, pokemon cards etc) you’ll see there’s usually a retrace. I spoke about this in relation to pokemon cards the other day here and the same logic applies to crypto. When you see massive gains like this you have a heap of people buying in for whatever reason driving the price up, some of the reason might be FOMO but I think there’s more than just that in relation to litecoin specifically which I’ll mention later. When the price surges so much you’re going to have people taking profits, if you look at the litecoin buy/sell order book on exchanges during this time you see some massive sell orders. The huge sell orders usually list a little lower than the ask so they can dump all their coins ASAP, once the buying slows down this kind of practice causes a price retrace as people undercut each other and supply outweighs demand. As for when this point is reached who knows, with so many nw coinbase accounts opening daily bull runs could go on for weeks or months like what bitcoin experienced.
In terms of litecoins price increase, some of the factors that I believe go into this are coinbase’s massively increasing user base - the site only supports BTC/LTC/ETH and with BTC/ETH being expensive already I think a lot of newer people jumping into crypto have been picking up litecoin. I also think these new users probably look at what they’re getting for their money and think owning 1 LTC is more attractive than 0.01 BTC. The mentality of why have a fraction of a coin when you could have a whole coin that might be the next BTC (with 60 million more coins in the cap over BTC it won’t be but I don’t think people understand this).
Other reasons for growth would be the demand for BTC and the ETH crypto kitties causing network degradation and long confirmation times, day traders are most likely working around this by doing instant swaps on the exchanges from BTC to LTC to make other trades, then converting back into BTC as a value store later. There’s no confirmation times doing this because it’s crypto the exchange already holds so they just assign you an equal value of LTC for your BTC and no actual transaction takes place - you get the crypto instantly and can make your actual trades on LTCs uncongested network.
Charlie Lee has also been appearing on a lot of national news station and doing a media push talking about crypto and he’s been raising LTC awareness and pushing it on all of his engagements, this has probably helped get more people into litecoin as well.
I also think that while bitcoin will probably still rise (Elon Musk tweeted recently that he expects 35k soon) it’s now at the point where there is far more risk to make serious money. Eg. You’ve got to pay $16k for one BTC then you need the price to jump to $36k to make $20k. That’s a huge amount of capital to tie up just to buy in … and bitcoin would need to more than double to get to the point where you make $20k. I’m not saying that’s impossible over time but it’s not a bet I’d be comfortable making … there’s also the risk that bitcoin halves and you lose $8k which is entirely possible in such a volatile market. On the other hand if you put that $16k into litecoin, you would have around 53 coins at a $300 buy in, the price would still need to more than double to make $20k on your litecoin investment but I think at this point it’s far more achievable for litecoin to get to the required $670 than bitcoin to get to $35k to make the same amount of cash … that’s only a $370 per coin increase and litecoin would still be cheaper than ETH and under $1k/coin.
I know a few BTC investors that have moved the majority of their holdings into LTC because they see more upside there, it’ll be interesting to see if they’re correct. One last interesting point that I should make is BTC/LTC has started to become popular in the sale of MTG cards, a lot of vendors now accept crypto payments and a lot of high end cards are being bought and sold with crypto.