The price of Litecoin (LTC) is down today, mirroring the downward move elsewhere in the cryptocurrency market.
LTC prices fell more than 1.5% to around $78.25 on Aug. 16, underperforming the rest of the cryptocurrency market, which fell 0.65% over the same period. The downside move is part of a broader correction trend that began in early July.
Litecoin halving turns into ‘sell news’
As discussed here by Cointelegraph, the decline in the cryptocurrency market coincided with a recovery in the U.S. dollar index (DXY).
However, Litecoin’s correction started a week earlier than the cryptocurrency market due to its overbought relative strength index (RSI) and the drying up of buying sentiment in the days leading up to the August 2 “halving”.
Since the day the RSI crossed the overbought threshold of 70, the LTC price has fallen by more than 30%. Meanwhile, the price is down 16.45% since the halving day — suggesting a “sell the news” scenario that will continue until the August 16 bearish meeting.
LTC ‘holds’ sentiment strong with sell-off
Data-tracking addresses (aka “hodlers”) that have held Litecoin for more than 155 days show continued accumulation sentiment.
It is worth noting that the monthly Hodler net position change The indicator turned from negative to positive on July 23 and has remained unchanged since then. In other words, Litecoin’s most loyal investors accumulated LTC tokens both before and after the halving, showing their bullishness on the market.
However, according to data from Santiment, Litecoin’s wealthiest investors (or whales) appear to be at the forefront of LTC’s ongoing sell-off.
For example, the Litecoin supply held by addresses with balances between 1 million and 10 million LTC has dropped 0.5% since ownership. Likewise, the supply of 100,000 to 1 million LTCs fell by 1% over the same period.
Typical post-halving sell-off?
Independent Market Analyst Rekt Capital emphasize The ongoing Litecoin dump is a typical event following the token halving. But eventually, the price found the so-called “accumulation zone” and rallied sharply, setting new all-time highs.
Historically, LTC has retraced -73% to -83% post-halving events, forming a new accumulation range (black),” Rekt Capital said, adding:
“So far, LTC has retraced (up to) -31% after the latest halving.”
In other words, if the historical cycle repeats itself, Litecoin will fall towards $40 in the next few months, a roughly 50% drop from current price levels.
Litecoin Price Prediction Q3 2023
However, from a technical point of view, LTC price is slightly more bullish. Currently, Litecoin’s price trend is lower within a descending wedge pattern, raising the prospect of a bullish reversal in the coming days and weeks.
Related: SEC Delays Bitcoin ETF Approval Deadline to Early 2024
A descending wedge forms when price moves within a range defined by two descending, converging trendlines. They resolve when the price breaks out of the ascending range and rises to a height equal to the maximum distance between the two trendlines.
As of August 16, LTC price is expected to break above the upper trendline of the wedge. Depending on the breakout point, LTC/USD could rise to a range between $83.25 and $95.75 by October, representing gains of 6% and 20%, respectively, from current price levels.
This article does not contain investment advice or advice. Every investment and transaction involves risk, and readers should do their own research when making a decision.
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