It has been a disappointing 24 hours for the Litecoin (LTC) price and cryptocurrency markets in general.
At the time of writing the Litecoin price is down 7% over the last 24 hours to US$196.13 per coin. This has reduced its market capitalisation to US$10.9 billion.
It also means that the popular altcoin has now lost almost half of its value since peaking at US$372.22 per coin at the end of 2017.
Why is Litecoin sinking?
There appears to be a few catalysts behind the cryptocurrency's latest decline.
The first being general weakness in the crypto market overnight. It isn't just Litecoin that is tumbling lower, the bitcoin (BTC) and Ripple (XRP) prices have fallen sharply as well.
This has reduced the total value of the market by 7.5% or US$35.2 billion over the last 24 hours.
This has been caused by concerns that lower trading volumes and low Google searches for "bitcoin" could be pointing to the end of the crypto boom.
In addition to this, overnight Harvard University professor and economist Kenneth Rogoff told CNBC that he believes that bitcoin is more likely to be priced at US$100 than US$100,000 in a decade.
He stated that: "If you take away the possibility of money laundering and tax evasion, its actual uses as a transaction vehicle are very small." Although Mr Rogoff didn't mention Litecoin, I feel it is safe to presume that what goes for bitcoin, goes for Litecoin, too.
Finally, another potential catalyst is reported issues with Litecoin's LitePay payment technology. The technology launched in February but is not yet fully functional. This appears to have some users doubting that it ever will be.
Which will be a real shame because the technology was seen as a great way of bringing Litecoin into the mainstream.
Should you buy the dip?
While I think there is every chance that Litecoin will be back above the US$200 mark again in the near future, a lot will depend on the performance of the crypto market in general.
Sentiment in the market seems to be especially low at the moment, which could weigh heavily on its performance in the short-term. I think the prudent thing to do is to sit this one out and watch on from the sidelines.
