Litecoin will hold its next halving on August 2 amid poor Blockchain performance.
Litecoin’s poor performance comes to light on the way to the next halving in the Blockchain that will take place on August 2. The Litecoin halving acts as a means to slow down the mining of LTC. This, in turn, increases the scarcity of the asset. Also, miners get 6.25 LTC in rewards for their input on this occasion.
Litecoin (LTC) Price Falls While Facing Resistance at $92
The decline in the price of Litecoin (LTC) has been a healthy correction as it pulls back toward the $92 mark. These corrections are common after prolonged uptrends and are often seen as an opportunity for the market to find stability before continuing its upward trajectory.
However, in the case of Litecoin, bears have become more and more dominant, indicating potential resistance ahead.
LTC has faced a significant drop in price, dipping below the crucial $90 level to $89.47. The altcoin has experienced a slight rise of 0.3% in the last 24 hours, which barely makes up for the worrying 3.6% drop in the last seven days.
This steep decline has caused concern among investors and traders as the bullish momentum, which looked promising at the time, appears to have taken a dramatic turn for the worse.
Litecoin Fights to Exceed $92
One of the key factors contributing to the current downtrend is Litecoin’s inability to break above the $92 mark. LTC has repeatedly failed to break this level and has instead made lower lows, indicating a loss of bullish momentum, as noted in this LTC price report.
When a cryptocurrency struggles to break through crucial resistance levels, it typically shows waning buying interest and increasing selling pressure, leading to a downward spiral.
As the LTC price continues to fall, investors are now concerned about the support level at $87.65. Historically, this level has held up during previous declines as a crucial barrier against further moves lower.
However, given recent price action and the lack of significant buying support, there are growing concerns that the $87.65 support level could fail.
Explaining the Halving
The Halving is one of the critical events that have shaped the history and price movements of Litecoin. Halving is a protocol-driven event that occurs roughly every four years on the Litecoin Blockchain. During this event, the block reward for miners is halved. In other words, miners receive 50% less LTC for verifying transactions and adding blocks to the Blockchain.
The purpose of the Halving is to control the inflation rate of Litecoin and ensure a limited supply, similar to the Bitcoin halving mechanism. By reducing mining rewards, halving makes it more difficult and expensive for miners to add new coins to circulation, reducing recent supply inflow. This shortage can lead to an increase in demand and potentially increase the price of Litecoin.
Examining Litecoin’s price action ahead of the next Halving can provide valuable insight into its market dynamics. During the lead-up to Halving, anticipation often builds, fueling speculative interest. However, after the Halving, the market tends to see more volatility, as it finds a new equilibrium with reduced supply.
By Marina Meza
