Unlike Bitcoin, the latest Litecoin halving failed to garner much interest from the investor community. Hours after halving, the Litecoin (LTC) price tanked by 5.67% and is currently trading at $87.44 with a market cap of $6.4 billion.
On Tuesday, August 2, the Litecoin blockchain network finally underwent the much-awaited halving event block 2,520,000. This halving event reduces the block rewards from 12.5 LTC to now at 6.25 LTC.
The Litecoin halving proved to be a “buy the rumor, sell the news” kind of event. On-chain data provider Santiment notes that amid the volatile $LTC market, social dominance has surged, causing signs of panic among many. Patience during this period of instability is proving to be challenging. A strong trader capitulation is what we have been seeing off lately.
After each of its prior two halvings, Litecoin’s price experienced drops for several months. On Wednesday, it fell by 5.7%. While the token’s price had risen about 60% between January and early July, reaching over $112, it has since slid back to $87.62. During this period, however, many other digital currencies also experienced significant rallies. Speaking to Bloomberg, Kyle Doane, a trader at Arca said:
“Long LTC was somewhat of a crowded trade at the beginning of the year when the narrative was in focus. Since then, the LTC narrative faded as the market shifted focus to the slew of spot BTC ETF applications.”
Investors and top analysts of the crypto market are quite optimistic about the Bitcoin halving next year in mid-2024. Many analysts are bullish that a strong price rally awaits as we approach the Bitcoin halving.
However, with Litecoin halving not turning out to be a much more bullish event, will Bitcoin meet the same fate? Looking at Bitcoin’s historical performance during the halving events, this outcome seems less likely.
Bitcoin, the largest cryptocurrency globally, usually experiences significant price impacts during its halvings. Before and after these events, Bitcoin’s price tends to rally. For instance, after the May 2020 halving, the price of Bitcoin surged approximately seven times in the following year before experiencing a sharp drop. Furthermore, there’s a strong interest in Bitcoin among the world’s largest asset managers such as BlackRock.
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