In a little over a month, the third halving for the Litecoin blockchain will take place, and many are expecting a rise in the price of the LTC crypto.
Exactly as is the case with the Bitcoin network, every four years the infrastructure miners see their rewards for each block mined halved.
Activity in the network has been growing significantly in recent days, hinting at a possible comeback for digital silver.
See all the details in this article.
Summary
The Litecoin (LTC) crypto and the coming halving: everything there is to know
In about 36 days, more specifically at the height of the 2,520,000 block, the third halving in history for the Litecoin blockchain will take place, with a high probability of impact on the price action of the LTC crypto.
The mechanism of Litecoin’s halving, similar to how it occurs in the Bitcoin protocol, involves a halving of rewards for network miners.
On 2 August, the day during which block 2,520.00 is likely to be validated, these rewards will drop from the current 12.5 to 6.25 LTC for each block mined and included within the chain.
Unlike Bitcoin, in Litecoin’s infrastructure this event happens every 840,000 blocks while in the former it happens every 210,000 blocks.
However, in digital gold the average confirmation “block time” is 4 times longer than in digital silver, so at the end of the day in both cases the halving occurs every 4 years.
The recurrence of the number “4” is also present in the supply of the two protocols, where in Bitcoin it is set at 21 million BTC, while in Litecoin this figure rises to 84 million LTC (4 times as much).
Following the genesis block mint in 2011, the Litecoin network and its native crypto already had 2 halvings, the first in 2015 and the second in 2019.
Now the entire community of the project, which was created to offer faster cryptocurrency payments than BTC, anxiously awaits the third halving of new LTC produced by the miners.
In the meantime, bitcoiners will have to be more patient, as the fourth halving for Bitcoin’s network is set for April 2024, the date when miners will start receiving 3,125 BTC for each block mined.
Will the halving of Litecoin contribute to the growth of the crypto LTC price?
Generally, when it comes to halving, in the case of both Litecoin and Bitcoin, the price of the two crypto assets is expected to grow.
Should history repeat itself as it has in the past, the price of Litecoin is expected to rise again this year.
Of course, this is by no means guaranteed, and indeed, as the years pass, these events hold less and less importance on the price action of crypto assets, as the market tends to discount in advance information that is known to the public
Beyond that, the fact that miner rewards are halved generally generates “scarcity” on the amount of crypto in the market, so with equal demand, the price should technically increase.
Clearly, in order to analyze the situation as objectively as possible, it is necessary to go and consider what the general market outlook is.
As a matter of fact, few care about the halving of Litecoin and the reduction of the issuance of new LTC if the Fed raises interest rates again or new geopolitical tensions arise.
Purely “technical” events certainly affect the price of Litecoin and other crypto assets, but secondary to the mechanisms that truly govern supply and demand in the market.
Moreover, let’s recall that Litecoin is still subservient to the influence of king Bitcoin, which always has the final say and in the event of a dump, it would take down its cousin as well.
At this point, assuming that no doomsday scenarios will arise in the market, based on what history teaches us, we might think that should there be a rise in the price of LTC, it would happen BEFORE the halving and not days after it occurs.
Moreover, taking the events of 2015 and 2019 again as a starting point, in each halving the top of LTC was touched 7 weeks before the halving, resulting in a price increase of about 380% by taking as the starting price that of 30 weeks prior to the halving of miners’ rewards.
From this perspective in the current cycle, the crypto would have already touched its high given that there are 6 weeks to go before halving, but without registering a price increase like the one just described.
At this stage, however, it has to be admitted that we are in a totally different market than in the years mentioned above and therefore the timing of price movements could be altered.
The latest moves by the SEC, restrictive economic policy by central banks, and an ongoing war have created unprecedented market conditions.
To the happiness of the digital silver community, perhaps there is still room for an LTC pump in anticipation of the long-awaited halving event.
Should the upward rates repeat in this cycle as well, regardless of the “time” factor, the crypto could reach over $300.
Technical analysis of LTC crypto
Let’s now turn to an analysis cue that disregards halving principles and assesses the crypto’s price action based on what the technical indicators suggest.
First, we should note the presence of strong support in the $77 area, where liquidity was concentrated at the local top in December 2022 and the lows in March and June 2023.
What is most likely these days is that LTC is trading within the $77-100 trading range, with no particular upward or downward acceleration.
In any case, should the psychological resistance of $100 be broken, we could expect a pump of at least 30% in a few days.
On the other hand, should the bulls surrender to the bears and the support at 77 be broken through, then we would likely expect a fall into the $60 area.
On a weekly time frame, we can observe how prices have been moving sideways since January, as if preparing for a strong unidirectional move.
The supertrend indicator suggests to give more importance to the upward view, as the short-term trend is bullish.
In the bull run of 2020-2021, this indicator worked perfectly to identify the optimal entry and exit, with a +360% performance.
On the other hand, bulls can boast the presence of a slight bearish divergence on the RSI, which could potentially push prices lower than they are now.
At the moment, the best thing to do is to wait for the formation of more convinced structures, which could confirm the end of the sideways period, giving encouraging signals for opening speculative long or short positions.
To take a position now would be like rolling the dice and relying on fate.
At the time of writing, LTC is registering a price of $88.24, a capitalization of $6 billion, and a trading volume in the last 24 hours of $518 million.
