The Litecoin (LTC) price decrease was a healthy retracement as it pulled back toward the $92 mark. Such retracements are standard after prolonged upward trends and are often seen as an opportunity for the market to find stability before continuing its upward trajectory.
However, in the case of Litecoin, the bears have become increasingly dominant, signaling potential resistance ahead.
LTC has been facing a significant price drop, falling below the crucial $90 level to $89.47, as reported by CoinGecko. The altcoin experienced a minor 0.3% increase in the last 24 hours, which hardly compensates for the troubling seven-day slump of 3.6%.
This sharp decline has sparked concerns among investors and traders, as the once-promising bullish momentum seems to have taken a dramatic turn for the worse.
Source: Coingecko
Litecoin Struggles To Surpass $92
One key factor contributing to the current bearish trend is Litecoin’s inability to climb past the $92 mark. LTC has repeatedly failed to breach this level and has instead posted lower lows, indicating a loss of bullish momentum, as noted in this LTC price report.
When a cryptocurrency struggles to surpass crucial resistance levels, it typically shows waning buyer interest and growing selling pressure, leading to a downward spiral.
As LTC’s price continues to decline, investors are now concerned about the $87.65 support level. Historically, this level has held firm during previous price declines as a crucial barrier against further downside movements.
However, given the recent price behavior and lack of significant buying support, there are growing concerns that the $87.65 support may falter.
Litecoin market cap currently at $6.5 billion on the daily chart: TradingView.com
Halving Explained
Halving is one of the critical events that have shaped Litecoin’s history and price movements. Halving is a protocol-driven event that occurs approximately every four years in Litecoin’s blockchain.
During this event, the block reward for miners is reduced by half. In other words, miners receive 50% fewer LTC for verifying transactions and adding blocks to the blockchain.
The purpose of halving is to control the inflation rate of Litecoin and ensure a limited supply, similar to Bitcoin’s halving mechanism.
LTC price action in the last 24 hours. Source: CoinMarketCap
By reducing the mining rewards, halving makes it more challenging and costlier for miners to add new coins to circulation, reducing the recent supply influx. This scarcity can lead to increased demand and potentially drive up the price of Litecoin.
Examining Litecoin’s price action before the upcoming halving event can provide valuable insights into its market dynamics. In the lead-up to the halving, anticipation often builds, driving speculative interest.
However, post-halving, the market tends to experience increased volatility as it finds a new equilibrium with the reduced supply.
(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).
Featured image from Sanfermin.com