With the Litecoin halving completed, we haven’t seen much positivity in the price action. On the contrary, we have seen the downtrend that the price was already in, continuing. From its previous block reward of 12.5 LTC, the block reward is now 6.25 LTC – cut in half.
This diminishing supply emission usually causes investors to pay close attention to a coin and leads to buying as the price needs to find an equilibrium between the production (mining) cost after the event.
We have seen a rise in June, but the price has decreased almost to the levels from which it came up from.
Is the rise around the halving anticipation already finished, and if not, when will the price start an upturn?
The price of Litecoin shot up from June 15, when an interaction with the broken resistance zone at $70 was made. It came up to a higher high of $114 on July 3, making an increase of 61%. Since then, it has fallen drastically and is currently sitting at $83, not very far from its July low of $79.
As you can see from the daily chart above, the price was in an uptrend from June 18, 2022. From its starting point of $40, which is the horizontal zone support, it came up and broke the zones resistance at $71. The following structure resembles a falling wedge, and the sideways movement (although in high percentages) was dominant.
We are still seeing the price in this sideways range, and even though strong momentum was seen in an attempt for a breakout, the price is still struggling to maintain an uptrend.
The previous Litecoin halving was on August 5, 2019. Assuming what will likely occur around the currently expected one is worth looking at some key metrics from the previous event.
Contextually speaking, the Litecoin halving of 2019 occurred amid a multi-year bear market. After reaching an all-time high (ATH) of around $420 on December 13, 2017, the price of Litecoin decreased to $22 exactly a year after (December 14, 2018), driving it back to pre-bull market values.
Since then, a steady price increase has been seen until June 24, 2019, when it peaked at $145. With this in mind, it is worth asking – Did the halving anticipation drive this price appreciation?
Worth noting is that from its June peak, the price proceeded to depreciate for 265 days, well past the halving when it was $106, and falling back down to $25.8 on May 13, 2020.
The price of Litecoin started consolidating once the Bitcoin halving anticipation began and really took off after May 11, 2020, when it ended.
Litecoin is in a similar spot contextually to where it was in the previous halving. On May 10, 2021, it reached $412, which peaked in the last bull cycle. From there, it started its bear cycle and fell to $41 on June 18, 2022, which was 398 days.
An uptrend started following that, leading the price above the significant horizontal support zone. However, the price increase we have seen didn’t develop impulsively, usually seen as the start of a bull cycle. Instead, we have seen a triangle forming from February 8, this year, which slowed down the momentum behind the increase.
From June 18, when this increase started, it looks like another corrective wave ABC to the upside developing. If this is true, then it is still part of the bear cycle as its second wave X, and this means that another move to the downside for wave Z should develop.
Its target could be back at the support zone between $41-70, but it could very well break the support zone below.
There could be a possibility that the increase from June 18 last year was the start of a bull cycle, but a bull market, which is usually led by Bitcoin halving – is still far off. The price of Litecoin will likely experience the same fate as in the previous halving – a slow deterioration in price until Bitcoin starts picking up steam in April next year.
Alternatively, there is a bullish case to be made, although with a lower possibility. In this bullish scenario, June 18, 2022, was the start of a five-wave impulse that ended on July 3, 2023, after reaching $114.
As this was the first sub-wave of the higher degree impulse, we are currently seeing the development of the first corrective sub-wave ABC which is going to establish the first higher low. According to the Elliott Wave Theory, the typical stopping point of wave 2 is at 0.618 Fibonacci retracement level of wave 1.
Coincidently (or not), this Fib level overlaps perfectly with the resistance level of the horizontal zone. Another final retest of its resistance for support might occur on the current downfall, resulting in a bounce that is going to propel the price into developing its strongest wave – wave 3.
Projecting the target at 1.618 with the Fibonacci extension tool, which is again a typical target in EW for the completion of wave 3, we come up with a target of $186. This is only the target for wave 3, and ultimately we would be looking at a price target above $210 for wave 5.
The price action has been mostly negative for the price of Litecoin since July 3. This negative price action could either be the start of the large descending move that will lead the price back inside the territory of the horizontal accumulation range, or can bounce from it.
Whether or not it bounces will determine which count is the primary one. If we believe what history implies, we should primarily expect this larger decrease. But if the price manages to hold above $70 on the current decline and starts increasing impulsively, that could be a sign that the bull cycle has started and that the price of Litecoin is headed toward $210.
Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.