Litecoin, often referred to as “the silver to Bitcoin’s digital gold”, is often an early indicator for the rest of the cryptocurrency market.
Should Bitcoin and the rest of the crypto markets do the same as Litecoin, the entire market could fall towards a double bottom or even lower – it could even suggest that Bitcoin’s halving is nothing but hype.
Litecoin leads crypto market towards double bottom
Litecoin has repeatedly shown signs that it is regularly the leading indicator for the entire cryptocurrency market – where Litecoin is going, the rest of the market tends to follow.
For example, this was the case in early 2019 when Litecoin hit a low of $ 20. At that point, Litecoin’s halving was only a few months away – Bitcoin is now a similar distance from its planned halving in May.
The premature hype caused the price of the crypto asset to rise by over 600% – to a high of $ 145 per LTC – before the asset topped again and returned to a downward trend. Litecoin is trading at around $ 43 today – over $ 100 less than it was before halving.
As Litecoin is an early indicator of the market and is now bottoming near its exit from the lower trading range, this could indicate that the rest of the crypto market is coming soon – including Bitcoin.
Litecoin’s halving was unsuccessful – what applies to Bitcoin?
Litecoin’s lackluster response to the halving could also mean that Bitcoin’s halving will not have the impact that many crypto investors expect from it. Any rally up to halving could be wiped out in a sell-off after halving – similar to Litecoin and its recent halving.
With each halving, the block rewards for the miners are reduced by 50%, destroying the delicate balance of supply and demand. And because cryptocurrencies like Litecoin and Bitcoin are hard-coded and digitally scarce, the idea is: With fewer sales of miners that flood the market, the purchase overwhelms the available offer – and the price increases.
While this has been the case with Bitcoin in the past, it could very well be random and have nothing to do with the halving. Litecoin’s lack of price rises after the halving could suggest that the halving is little more than hype – and the perfect opportunity for whales to dump their holdings at retail investors who are blinded by the narrative.
Crypto investors will find out soon enough – at the latest with halving bitcoin in May 2020.