Reclaim $100 After Post-Halving Sell-Off?

Published on:


Litecoin (LTC) price hit a third consecutive post-halving crash when it tumbled 24% on August 17, dropping to a 2023 low of $56. Historical on-chain data provides insights into how Litecoin investors reacted to similar price crashes in the past. Will Litecoin’s price reclaim $100 or break below $50 in the coming months? 

Litecoin (LTC) price slumped by double-digits on August 17 to complete an unwanted trilogy of post-halving crashes dating back to 2015. Historical data trends suggest there could be light at the end of the tunnel for LTC holders in the coming months

Why is Litecoin Price Going Up? 

Since the Halving event on August 2, multiple bearish signals have emerged on the Litecoin network, ranging from miners’ sell-off to a conspicuous decline in whale transaction volumes. 

However, one vital on-chain data point has stood out – LTC long-term holder addresses. Historical data suggests that it could be the reason Litecoin’s price is going up. 

For context, when the Litecoin price dipped to yearly lows in July 2021 and June 2022, the count of Litecoin long-term holders rose by 100,000 and 870,000 addresses, respectively. On both occasions, this resulted in a 32% price recovery by the end of 2021 and a 60% recovery for 2022.

A similar trend seems to have emerged after last week’s Litecoin price crash, according to data compiled by IntoTheBlock

How Litecoin (LTC) Price Could Reclaim $100 | Long-Term Holder Addresses | Source: IntoTheBlock

While the price sank to the 2023 low of $56, rather than abandon ship, Litecoin long-term holders have once again shown resilience. As shown above, between August 17 and August 21, the count of long-term holder wallets has already increased by 10,000 addresses. During that period, LTC’s price rebounded from its flash crash on August 17 by 16%.

The long-term holder is a crypto terminology that references wallet addresses that have held their coins unmoved for 1 year or more.

Having consistently shown a willingness to HODL their assets through adverse market fluctuations and short-term volatility, resilient LTC long-term investors could trigger another price recovery in 2023. 

Mathematically, if the number of Long-term holders continues to increase, Litecoin could reclaim $100 if it scores anywhere between 32% to 60% price recovery, as observed after LTC hit yearly lows in 2021 and 2022.   

Will Miners Force Price Below $50? 

While long-term holders are angling for a recovery, Litecoin miners’ bearish trading activity raises concerns that the LTC price could drop below $50. 

Escalated by the August 2 halving, rising power costs, and the August 17 price dump, LTC miners have rapidly depleted their reserves in recent weeks. 

The chart below shows that the after the halving, the Miners’ cumulative reserves stood at 2.51 million LTC on August 3. However, as of August 21, it has now dwindled to 2.18 million LTC.

This means the miners sold 330,000 LTC worth approximately $22 million within three weeks.

How Litecoin (LTC) Price Could Reclaim $100 | Miner Reserves
How Litecoin (LTC) Price Could Reclaim $100 | Miner Reserves | Source: IntoTheBlock

Miner Reserves tracks real-time changes in the cumulative wallet balances of recognized miners and mining pools. When Miners deplete their reserves, as seen above, it indicates they are dumping their block rewards on the market. 

Evidently, the Miners’ selling pressure has put immense downward pressure on Litecoin’s price in the short term. 

However, historical data shows that similar fluctuations in miner reserves often do not impact LTC prices significantly in the long term. 

Most notably, global energy prices escalated after the Russia vs. Ukraine war broke out in 2022. In response, LTC miners offloaded 2.52 million LTC (38% of their 6.51 million LTC reserves) between September 28, 2022, and January 1, 2023.

But interestingly, that did not stop LTC price from gaining 32% as it jumped from $53 to reclaim $70 during that period.

The miners now control much less of the Litecoin circulating supply in 2023. Hence, their current sell-frenzy is unlikely to force the LTC price below $50. 

In summary, even if the miners continue to sell, LTC price could still reclaim $100 in 2023, provided long-term investors HODL and the general sentiment surrounding the crypto market improves. 

LTC Price Prediction: A Slow Bounce to $75

The current bearish headwinds surrounding the altcoin markets could slowdown Litecoin price recovery. However, drawing inferences from the historical on-chain data trends above, LTC price could see a slow uptick towards the $75 level in the medium term.

The Exchange On-chain Market Depth chart, which shows the price distribution of current active orders, also confirms this positive outlook. As depicted below, the market demand for Litecoin has now outpaced supply.  

Strategic crypto traders have placed active orders to buy 50,630 LTC to defend the $60 support level. But, even if that cannot hold, the 76,130 LTC purchase orders at $55 could offer more significant support.

Litecoin (LTC) Price Prediction | Exchange Market Depth, August, 2023
Litecoin (LTC) Price Prediction | Exchange Market Depth, August 2023 | Source: IntoTheBlock

Conversely, Litecoin could edge towards reclaiming the $100 milestone if the long-term holders begin to accumulate more coins. 

But, as shown above, crypto traders have opened orders to sell 40,490 LTC once the price hits $73. They will likely halt the recovery around the $75 mark without sufficient market demand.

However, if LTC can scale that resistance, the bulls could garner momentum and push for the $100 target.

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.



Source link

Related