The Aftermath of Litecoin Halving- An Explanation
Litecoin has descended below $100, as was expected. After the rewards halving, miners will face a difficulty adjustment and will likely sell some of their stocked Litecoin to recoup during this period. Traders and miners locked in gains after the run-up provided a payday.
The "buy the rumor, sell the news" phenomena has occurred. Litecoin rose 29% before the rewards halving on news that the rewards halving would be similar to the Bitcoin rewards halving that has historically led to a bull market. As the media picked up the story, the Litecoin price pumped from around $79-100 in a day. The Litecoin hashrate, a leading indicator of a cryptocurrency price movement in a POW coin, fell before the halving as expected due to a difficulty adjustment for the algorithm used to mine Litecoin.
The takeaway lesson from the Litecoin rewards halving pump is that you must crystalize your gains in the volatile cryptocurrency market as a trader and study past trends and historical indicators to protect yourself from losses.
As Bitcoin's market dominance has increased to almost 70%, altcoins including Litecoin have seen price decreases. Money is moving from the altcoin market to Bitcoin, which has put downward pressure on almost all cryptocurrencies. I have my eye on Litecoin, and will buy around $85 as Bitcoin continues its rise and the rewards halving gets further in the rear-view mirror. The price action was predictable and is part of a historical trend.
Picture from Pixabay.