Litecoin Corrects, Founder Charlie Lee Warns of Dangers of Fast Rise

Charlie Lee has warned a downward trend may come after the meteoric rise.

The price of Litecoin rose to a peak above $370, and gained while founder Charlie Lee was on CNBC's Fast Money, talking as part of Crypto Week. But once the coverage subsided, the price of Litecoin fell toward $270, still keeping some of the gains.

The fast rise of Litecoin has turned into a slow slide over the past days:

The coin's sharp climb was seen as "ludicrous" when it happened, inviting warnings that for Bitcoin, as well as Litecoin, sending in all of one's savings at this point may not be a wise move. Charlie Lee warned in a previous tweet that some profit-taking from Bitcoin may be wise, and by association- to take some profit off Litecoin as well, as the peak prices were uncertain.

And yet the rise of Litecoin, which was stuck around $50 and had a slow and gradual rise, put it in the spotlight as a rather liquid and useful digital asset. For now, no mainstream investment products have been attached to the coin, but there has been some talk that user demand may lead to the creation of derivative products.

The rise in Litecoin reflects a rising interest for cryptocurrencies in the USA. The driver of this inflow are Coinbase and GDAX, as the US dollar went ahead of the yen as the most actively traded fiat against Bitcoin.

Litecoin's trading is around 5.72% of worldwide volumes at the moment, subject to change. Litecoin has a small fraction of the trading going on against the USDT, but too small to affect numbers. But lately, Litecoin was used as a convenient currency to withdraw from exchanges, as the Bitcoin network was clogged with transactions.

The Litecoin hash rate has gone flat in the past few days, with block time stretching to 2.5 minutes. It is yet to be seen whether more miners join Litecoin at the higher prices. The difficulty has been flat in the past month, with a small increase in difficulty coming later today.