Litecoin (LTC) enthusiasts are abuzz in anticipation of the upcoming halving event in August 2023. LTC creator Charlie Lee has high expectations as he predicts LTC/BTC could rally to 0.025 BTC, a 700% increase, in the next bull cycle. Lee attributes Litecoin’s potential growth to its design with higher throughput, scalability through extension blocks, better fungibility, and increased privacy from MWEB.
However, there is a catch. Litecoin has experienced an 85% price recovery since June 2022’s record low of 0.001716 BTC. Despite this recovery, it remains 90% below the record high of 0.051 BTC in November 2013. This situation could be credited to increased competition in the altcoin market.
Historically, the months preceding Litecoin halving events have seen increased LTC accumulation. The first halving event in August 2015 saw a price rally of 450% against BTC. However, the second event saw limited gains as Bitcoin’s crypto dominance grew amid the U.S.-China trade war. Furthermore, LTC/BTC typically experiences a significant drop after halving events, suggesting a similar outcome after August 2023.
Litecoin price technicals show a bear flag pattern hinting at a bounce towards 0.0035 BTC ahead of the halving. However, its bear flag target sits around 0.0024 BTC, a 20% decrease from current price levels.
When comparing Litecoin to the U.S. dollar, LTC’s price has fared better in the months leading up to previous halvings. For example, prices increased 250% before the first halving and 500% before the second halving. Currently, prices are up 120% from sessional lows of around $40 in anticipation of the August event. A mix of technical and on-chain indicators predicts a continued increase in the coming months.
Glassnode’s MVRV-Z score of -0.139 suggests Litecoin is undervalued relative to its fair value. When market value is substantially higher than realized value, market tops occur. Conversely, market bottoms lead to strong bullish reversals when the opposite is true, as demonstrated by Litecoin’s recent entry into the green zone.
Technically speaking, LTC’s price is well-positioned for a rebound after retesting its multi-month ascending trendline as support. Considering this, LTC/USD could potentially climb towards a horizontal resistance level near $100, representing a 20% increase from current prices.
While the road ahead for Litecoin appears promising, it is essential for investors and traders to conduct their research and consider potential risks. The upcoming halving event in August 2023 looms ahead, and Litecoin’s price trajectory is anyone’s guess. Will LTC soar high or take a downward plunge? All eyes are on the market to see what unfolds.