Litecoin price clings to $90 support as hype around LTC halving declines
|- Litecoin halving is scheduled to occur on August 2, less than a week away.
- The boost surrounding LTC on social media slowly wanes, and LTC price trades near support at $90.
- Litecoin network’s social dominance is at levels previously seen in spring.
Litecoin (LTC), one of the largest altcoins in the crypto ecosystem, is looking south despite getting closer to its halving scheduled for August 2. While usually crypto assets tend to see a price increase right before a halving event, some of the altcoin’s on-chain metrics have recently worsened, painting a bearish picture for its price.
Litecoin trades at $91.25 at the time of writing, above a key support level at $90.
Also read: Litecoin likely to lead alt season rally counting down to the LTC halving event
LTC hype fades as Litecoin halving draws closer
Less than a week away from the halving, discussions about Litecoin among holders and traders are declining, according to the altcoin’s social dominance and daily active addresses in its network.
Based on data from crypto intelligence tracker Santiment, daily active addresses on Litecoin hit a peak in May and also increased somewhat in June, but dropped to an average level in the week 4 of July. Address activity hasn’t been significant recently, as seen in the chart below, and the spike in trade volume registered in the first week of July has failed to catalyze a recovery in the altcoin’s price.
Litecoin price, active addresses (24h) and trade volume (Santiment)
Similarly, social dominance, an on-chain metric that measures the mentions of the asset across social media platforms, is at levels previously seen throughout April and May. A spike in social dominance is typically correlated with a price rally in the asset. However, in Litecoin’s case, social dominance has waned throughout July.
Price and social dominance (Santiment)
These bearish on-chain metrics, combined with lackluster price action from the altcoin, indicate that LTC price may fail to make a recovery to its $100 psychological target in the short term. It remains to be seen whether the halving event acts as a bullish catalyst for LTC.
Litecoin trades at $91.18 on Binance at the time of writing. The immediate support for LTC is at the $90 level, followed by the 200-day Exponential Moving Average (EMA) at $87.46. In the event of a bullish trend reversal, Litecoin price is likely to attempt a recovery with a target of $100, previously attained in mid-July.
Litecoin halving FAQs
When is the next Litecoin halving?
Litecoin’s third block halving event is scheduled to take place at a block height of 2,520,000, which is estimated to happen around August 3. The current block height is 2,511,587. The first halving took place in 2015 after the block height was 840,000. The second Litecoin halving event occurred in 2019 when the total block height hit 1,680,000. This event takes place roughly once every four years.
What will be the new block reward after the third Litecoin halving?
Halving is an important event for both miners and investors. After halving, the block rewards are slashed in half, as the name suggests. The first halving event in 2015 reduced the block reward from 50 to 25 and the second one in 2019 halved it to 12.5. The third halving, which is scheduled on August 3, will further reduce it to 6.25. This means that miners will go from receiving 12.5 LTC for mining a block to 6.25 LTC after the third halving.
How will halving affect Litecoin price?
After a halving event, the emission of LTCs is cut in half, which effectively triggers a reduction in the Litecoin supply. If the demand remains more or less the same, it creates a negative supply shock. The same dynamics are seen if the demand for LTC increases. Due to the reduced supply and high demand, it would trigger a rally in Litecoin price. But traders often anticipate this trend and try to get an exposure to LTC before the halving, causing a premature rally and a sell-the-news drop on the day of the event.
Why is Litecoin halving important to LTC holders?
Following a halving event, miners receive 50% fewer rewards for every block they mine and this creates scarcity in the altcoin, reducing the circulating supply of the asset. The event’s purpose is to control the inflation rate of Litecoin. Halving is therefore a key event that influences the asset’s price and market capitalization over time.
How different is Litecoin halving from Bitcoin halving?
From a technical perspective, it is not any different. But from an investor and miner perspective, there are lot of differences. For example, the concept of halving remains the same for both assets, but due to relatively lower total supply of 21 million and first-mover advantage, Bitcoin’s network effect and large market capitalization as a result has a significant impact on the crypto ecosystem as compared to Litecoin. Additionally, the effect of halving events is more pronounced for Bitcoin, because of the asset’s dominance, hence BTC halving receives more attention.
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