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Litecoin Completes Halving, But Price Plunges 6%

Litecoin has completed its much-anticipated halving event today, but it seems the investors have reacted by participating in a selloff.

Litecoin Has Completed Its Third Halving, Block Rewards Now Down To 6.25 LTC

The “halving” event is where LTC’s block rewards are permanently cut in half. This event is periodic, occurring approximately every four years or roughly every 840,000 blocks miners hash.

Today’s halving was Litecoin’s third, meaning its block rewards have been cut three times since its genesis. In the first halving, the cryptocurrency saw its block rewards go from an initial 50 LTC to 25 LTC, and with the second, the tips dropped further to 12.5 LTC.

With the latest halving event, miners’ rewards for solving blocks have been cut down further to 6.25 LTC. The reason that halvings even exist is because they serve as a measure for controlling the asset’s inflation.

These block rewards that miners receive are the only way to introduce fresh tokens into the circulating supply, so cutting them down repeatedly makes sure that the cryptocurrency’s supply goes up slower and slower.

Eventually, when the halvings would keep on happening, the block rewards would approach zero. This would occur approximately in 2142. After this point, the asset’s supply will hit the maximum cap, and the miners will have to rely on transaction fees to pay off their running costs.

As halvings are important events, it’s natural that there has been a lot of discussion around this latest event as it has approached. During the start of July, the asset had observed a sharp rally towards the $114 mark, as the market had perhaps become hopeful for the halving, which was only one month away.

This rally, however, ran out of steam soon enough, and since then, LTC has struggled to put together any significant bullish momentum.

Litecoin Price Chart

Today’s halving hasn’t been able to change anything in this matter, either, as Litecoin has only plummeted further instead. It would appear that the event has indeed been a buy the rumor, sell the news type of scenario.

Following the latest plummet, Litecoin has gone below the $87 level and is down almost 7% during the past 24 hours. These high losses mean that LTC has been the poorest-performing coin out of the top cryptocurrencies by market cap in this period.

While the price performance of the asset might have been poor, LTC supporters may take solace in the fact that the asset has come forward a lot in terms of other network-related metrics since the previous halving, as data from IntoTheBlock shows:

Litecoin Comparison

Interestingly, the price at which both halvings happened was approximately the same. The cryptocurrency seems to have done well in terms of userbase and utility-related growth.

This impressive rise in adoption may be because Litecoin offers cheap and fast transactions compared to some other networks like Bitcoin. LTC investors can only hope, however, that this growth may also show up in the price.

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Sell The News? Litecoin Traders Capitulate Ahead Of Today’s Halving

On-chain data shows that Litecoin traders are showing signs of capitulation as the asset’s much-anticipated halving event is only a few hours away now.

Is Litecoin Halving A Buy The Rumor, Sell The News Event?

The “halving” here refers to a periodic event where Litecoin’s block rewards (that is, rewards that miners receive for mining blocks) are permanently cut down in half.

This event takes place approximately every four years and the next one, which would be the third, is scheduled to happen in around five hours if data from the mining platform NiceHash is to go by.

Litecoin Halving

This third halving event will reduce the cryptocurrency’s block rewards from 12.5 LTC to 6.25 LTC. Historically, these events have been important for the asset, as they mark points where the cryptocurrency’s production rate (which is nothing but the block rewards, as miners releasing these coins is the only way to mint new LTC) shrinks, and hence, the coin becomes more scarce.

As these halving events are so significant, the market naturally speculates around them, leading to the coin experiencing volatility. In a new tweet, the on-chain analytics firm Santiment has revealed how the traders have been behaving in anticipation of today’s Litecoin halving.

Litecoin On-Chain Metrics

In the above graph, Santiment has attached the data of two metrics related to LTC: “social dominance” and the “ratio of on-chain transaction volume in profit to loss.”

The former of these tells us what percentage of discussion on social media related to the 100 largest assets in the cryptocurrency sector is coming from Litecoin alone.

From the chart, it’s visible that this indicator has observed a large spike today, showing that investors are participating in a large number of discussions related to today’s halving.

The other indicator keeps track of the ratio between the profit-taking and loss-taking volumes on the network. As displayed in the graph, this metric has taken a plunge below the 1 mark recently.

The ratio being less than 1 implies that loss-taking is the dominant force on the market at the moment. The loss volume is not only more than the profit volume right now, but it’s actually outweighing it at a ratio of more than 2:1.

This extraordinary loss-taking may be coming from the investors who purchased coins ahead of the halving believing it to be a bullish event, but as Litecoin has only gone down lower recently, the holders have panicked and are selling at losses in an attempt to avoid going further underwater. The high social dominance of the asset may also likewise be because of FUD-related discussions blowing up.

Based on these signs, it’s possible that Litecoin may be going through a classic “buy the rumor, sell the news” event.

LTC Price

At the time of writing, Litecoin is trading around $91, up 1% in the last week.

Litecoin Price Chart

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Litecoin Sharks Buy More Than 200,000 LTC Ahead Of Wednesday’s Halving

Over the last few months, Litecoin has emerged as one of the top trending cryptocurrencies due to its halving event happening in August. As this event drew closer, crypto investors began filling up their LTC bags in preparation for what is expected to be a very bullish event. And now, with less than two days left to go before the halving, sharks have made remarkable moves to position themselves for possible upside.

Litecoin Sharks Load Up Their Bags

A report shared by the on-chain tracking platform Santiment revealed how Litecoin investors are currently looking at the digital asset. The chart showed an impressive accumulation trend from dolphin and shark wallets, which have increased their holdings significantly in the last month.

Santiment’s report shows that these wallets holding between $9,500 and $950,000 worth of LTC have added over 200,00 coins to their balances since June 14. On this date, the total holdings of these wallets were sitting just slightly below 18 million. However, in the next two weeks, their balances grew above 18.1 million coins.

Litecoin sharks and Dolphins

There has also been a semi-constant uptrend among these investors. Although there were dips here and there in their holdings, they remained committed to the accumulation over this last two weeks, each time buying more coins than they sold.

What Is Driving The LTC Accumulation?

The current accumulation from the dolphin and shark wallets are not isolated and just like the whale acquisitions, they are being driven by the same thing. The Litecoin halving is expected to take place on Wednesday and since this event has been historically bullish, it has triggered active participation from investors looking to capitalize on it.

If the LTC halving plays out as expected, then it is possible that the price of the altcoin will climb above $100 once more. This would put the majority of the LTC accumulated by the dolphin and shark addresses over the last two weeks back in profit territory.

However, the days leading up to the event haven’t been as bullish as expected. Even though LTC’s price is still trading above $90, it has seen only single-digit daily gains over this time. Naturally, with less than two days to go, there should have already been some rapid increases for the cryptocurrency but there has been none.

This current trend suggests that the halving may already be priced into LTC’s price, especially given the fact that the crypto bear market has continued.

At the time of writing, LTC is changing hands at a price of $93.80, down 0.98%, according to data from Coinmarketcap.

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The Litecoin $95 Question: Is A Bullish Breakout In The Pipeline?

Litecoin (LTC) is facing a critical juncture in its price surge, with its value hovering just above $89.52 on CoinGecko, showcasing a modest 0.3% increase in the last 24 hours. However, LTC has endured a slump of 3.6% over the past seven days. 

As the price continues to hover below the crucial resistance level of $95, investors are wondering if the muted performance of Bitcoin (BTC) will hinder LTC’s upward trajectory. Furthermore, all eyes are on the upcoming August halving event to determine if it will catalyze significant price action.

Understanding Litecoin Halving

In the context of cryptocurrencies like Litecoin, a halving is a programmed event that occurs when a specific number of blocks are mined on the blockchain. Litecoin, similar to Bitcoin, has a fixed supply cap and new coins are introduced into the market through mining. 

Approximately every four years, the mining reward for each block is cut in half, reducing the rate at which new coins enter circulation. This process is known as “halving” and is intended to control inflation by gradually limiting the supply of new coins.

LTC’s price surge beyond $95 has encountered significant resistance, as this level had previously acted as support in early July. However, as BTC’s performance weakened, the support flipped to resistance, creating an obstacle to Litecoin’s advancement.

The fate of LTC’s price action remains closely intertwined with Bitcoin’s performance, as the latter serves as a bellwether for the broader cryptocurrency market.

Impact Of BTC’s Performance

Being the most dominant and influential cryptocurrency, Bitcoin often dictates the market’s direction. If BTC remains weak, with its price currently at $29,414 at CoinGecko, Litecoin’s ability to break past the immediate $95 resistance level could be hindered. 

A retest of the 38.2% Fibonacci retracement level at $88 might be possible in such a scenario. On the other hand, a solid and decisive move by Bitcoin could have a positive knock-on effect on Litecoin, propelling it past the resistance and potentially sparking a more significant price rally.

As the Litecoin halving approaches, investors are speculating whether this event will drive a significant price surge. Historically, halvings have been associated with bull markets in cryptocurrencies, as the reduced supply of new coins can create a supply-demand imbalance, leading to higher prices.

However, it’s essential to recognize that the market’s sentiment, overall health, and broader macroeconomic factors also play crucial roles in determining price movements.

(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).

Featured image from PublishOx