Litecoin price surged Tuesday to retest $100. However, historical data shows that LTC will likely pull back as the Litecoin Halving date approaches. Are miners already in sell mode and have hard times ahead? Crypto analyst Ibrahim Ajibade goes into detail.
Reaction of Litcoin price before and after halving
cryptocoin.comAs you follow, the highly anticipated Litecoin Halving will take place on August 2, 2023. Despite the 5% price increase this week, the major holders in the LTC ecosystem seem to be taking a bearish position. On-chain historical data reveals Litecoin’s unremarkable “price crash” trend in the weeks before halvings in 2015 and 2019.
Prior to Litecoin’s first halving event in 2015, LTC price peaked at $7.54 on July 10. However, it fell 42% to $4.40 on the August 5 halving date. A similar pattern happened during the 2019 cycle. LTC price peaked at $142 on June 23, 2015. However, it later dropped 53% on the August 5 halving date to $93. The post-halving downtrend continued for several months before Litecoin entered another rally in January 2020. Will history repeat itself this year?
Litecoin miners run out of reserves in July
After adding 300,000 coins in June, Litecoin miners started depleting their LTC reserves in July. IntoTheBlock’s Miner Reserves data shows that between July 5 and July 11, Litecoin miners disposed of 90,000 coins.
Miner Reserves tracks real-time changes in wallet balances of well-known miners and mining pools. The miners’ depletion of their reserves indicates that they want to profit from current prices, as seen above. The chart above shows that despite the recent LTC price increase, miners took a bearish position prior to the halving event.
Historical price data for 2015 and 2019 shows that LTC has fallen twice immediately after each halving. Many miners, who want to prevent the post-halving sales frenzy, are trying to dispose of some of their reserves as the date approaches. This has in the past caused LTC prices to drop towards the Halving dates. If history repeats itself, it is possible that the ongoing Litecoin price rally will be short-lived.
Traders place sell orders between exchanges
As another confirmation of the bearish outlook, many Litecoin holders are accumulating orders to sell their LTC coins ahead of the Halving. Currently, crypto traders have put 414,000 LTC coins on sale. Meanwhile, potential buyers have only placed active orders to buy 411,000 LTC.
The Exchange On-Chain Market Depth chart shows the real-time price breakdown of active limit orders placed on well-known exchanges. Currently, Litecoin supply on exchanges exceeds demand by more than 3,000 coins. As historical trends show, if the bearish momentum builds up ahead of the Halving, it is possible for LTC to enter a major price correction.
Litecoin price prediction: Drop towards $80!
Considering the historical trends and bearish factors described above, LTC will likely drop to $80 in the coming weeks. Litecoin will need to drop below $90 for the bears to be sure of a reversal. However, as seen below, 1.26 million investors bought 11.8 million LTC at an average price of $88.42. This group is likely to form a support buy wall to avoid falling into a net loss position. However, if the bearish momentum picks up as expected, Litecoin could decline sharply below $8.
Conversely, if LTC breaks the $100 resistance, the bulls are likely to hold the stronghold. However, a cluster of 572,000 investors bought 3.63 million LTC at a minimum price of $100.95. If they choose to sell their holdings amid the halving uncertainty, they could inadvertently trigger a pullback. However, if it breaks the resistance, it is possible for LTC to reach a new high of $120 in 2023. However, this probability is not very high.
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