In afternoon trade the litecoin (LTC) price appears to be running out of steam after a sensational move higher this week.
At the time of writing the litecoin price is down 5% since this time yesterday to US$220.18 according to Coin Market Cap.
As a comparison, the bitcoin (BTC) price is currently up over 7% over the last 24 hours to US$10,272, Ethereum (ETH) is 3% higher at US$949.58, and Bitcoin Cash (BCH) is almost 10% higher to US$1,480.
Why is Litecoin sinking lower?
I suspect that today's decline is the result of profit-taking from cryptocurrency traders. After all, the popular altcoin has seen its value more than double during the last 10 days.
On February 6 Litecoin was priced at just US$108.43, whereas overnight it reached as high as US$236.
Traders have been fighting to get hold of it due to a couple of positive developments this week.
The first is the introduction of LitePay. The merchant payment processing technology will officially launch in 41 countries on February 26 and will allow businesses to accept Litecoin payments by instantly processing the payments that are settled directly with their banks.
In addition to this, a LitePay Visa card will be available and will be accepted wherever Visa cards are accepted, taking the money directly out of the user's Litecoin wallet.
The second development was news that Litecoin is going to follow in the footsteps of bitcoin and have its own hard fork next week.
The fork will result in the launch of Litecoin Cash. Essentially this is an upgraded version of Litecoin with quicker processing times and lower transaction costs. It has been designed to increase its appeal for real world use. Owners of Litecoin at the time of the fork will receive 10 Litecoin Cash tokens.
Should you buy Litecoin?
I think these are very positive developments for Litecoin holders and I can't say I'm surprised to see its price rally on the news.
But it isn't enough for me to part with my money. I'll be watching on with interest next week when the hard fork occurs and then when LitePay launches, but it'll be from the safety of the sidelines.
