Key Takeaways:
- LTC price risks a 15% drop.
- A halving event in a few hours will unlikely trigger a rally.
- Both past Litecoin halvings featured an accumulation rally before and a dump after.
YEREVAN (CoinChapter.com) – Litecoin LTC price shaved 5% off its value in the previous 24 hours, dropping to $91 in the European session on Aug 2. The move came as a continuation of the bearish momentum, and the token lost 21% since peaking at $115 on July 3.
Meanwhile, the veteran altcoin eyes another 15% drop in value, as it has been trading within a consolidation channel year-to-date.
The setup features two rising trendlines with a powerful mid-range. After the decline in July, Litecoin (LTC) price action retested the channel’s mid-range thrice since July 22, unable to breach it. The latest retest came on Aug 2 in the Asian-Pacific session.
Given the drop in trading volumes, another channel support retest appears likely within the next two weeks. Thus, the LTC price risks declining by another 15%, as the target price would be approximately $76.
Litecoin halving won’t trigger a rally
In the previous Litecoin review, CoinChapter mentioned the “buy the rumor, sell the news” scenario, the possibility of which is still high. The phenomenon occurs when a coin gains traction and price increases before a large event and slumps immediately.
Litecoin blockchain halving event, scheduled for Aug 2 at 17:25 GMT, could qualify LTC for another leg down.
During a halving, the amount of Litecoin created each time a block is mined is cut in half (12.5 to 6.25 LTC). It strengthens the incentive to mine as much as possible just before the halving. Additionally, the halving puts more value on each existing LTC coin, as investors are aware of the slower production of each coin moving forward.
The whales, or addresses holding large amounts of LTC, knew about the event and stacked their treasure chests beforehand, pumping the price and unloading some of their holdings. When the halving occurs in a few hours, the price will NOT immediately respond if the past is any indication.
At the time of the first halving, in August 2015, Litecoin token changed hands at approximately $3.0 for over 1.5 years. Then LTC took off, inspired by the bitcoin rally, and saw prices rise as high as $370 by Dec 2017.
A similar pattern played out after the second halving in Aug 2019. In both events, the price rallied before the halving and flatlined when traders opted for taking profits.
