LTC Sees Last-Minute Slump in Value

On Aug 2, 2023

The Litecoin [LTC] blockchain is approaching its third halving in its 12-year existence, scheduled to occur in less than five hours. This upcoming event will decrease the LTC reward per block from 12.5 LTC to 6.25 LTC and is expected to take place around 15:11 GMT [11:11 am ET]. Previous halvings took place on Aug. 5, 2019, and Aug. 25, 2015. As the community awaits this update, LTC has been witnessing significant volatility.

Also Read: Litecoin Halving ‘Hype’ Fails to Rally Price Despite High Interest

Price

Currently, LTC is being traded at $91.03, showing a 0.68% daily increase. Beforehand, it experienced a drop from $94.24 to $90.04. Despite this recent decline, the community was not caught off guard, and they do not anticipate an immediate rally for the asset following the halving event. After the August 2015 halving, Litecoin remained within the price range of $2.8 to $3.6 for a period of 19 months.

As a result, there was a substantial price increase that coincided with a Bitcoin rally, propelling Litecoin’s prices to reach as high as $370 by December 2017. A similar trend was witnessed after the August 2019 halving. Consequently, some analysts have put forth the idea that halving may no longer act as a bullish catalyst. Crypto analyst DonAlt said,

“The halving isn’t a bull catalyst anymore. It’s a drag given a bunch of people only bought it in anticipation.”

Presently, Litecoin’s trading is confined within two significant supply barriers. The first barrier serves as a support in the price range of $87 to $90, representing 625,000 addresses that purchased 7.8 million LTC. The second barrier, acting as resistance, lies between $90 and $93, with 590,000 addresses holding 6 million LTC.

Litecoin’s founder Charlie Lee, however, remains hopeful. During a recent Twitter spaces event, Lee said,

“If the supply side gets cut in half and the demand stays the same, then the price should go up.”

Litecoin’s network activity

The hash rate of Litecoin has reached its all-time high. Currently, the network’s hash rate stands at 786.50 TH/s. A rising hash rate indicates increased security and stability for the blockchain network, making it more challenging for ill-doers to compromise the system.

Furthermore, the total number of addresses on the Litecoin network holding balances also achieved a record high. However, transaction volumes appear to have decreased. Overall, according to Messari, Litecoin still maintains its position as the fifth most active blockchain in the industry.

At the moment, LTC is considered undervalued, as indicated by its Market Value to Realised Value [MVRV] ratio. As the ratio increases, it suggests that more individuals might be inclined to sell, driven by the prospect of higher potential profits. Currently, LTC’s MVRV ratio stands at 0.988, implying that if all holders were to sell their holdings at the current price, most of them would incur losses. However, since the MVRV is on the verge of hitting 1, the losses will be dainty.