In the months leading up to Litecoin’s halving in August, the price of the blockchain’s native LTC token rose steadily. This renewed interest among investors who rushed back into the token, eventually pushing the price above $100. That is until the actual halving happened, making it a ‘buy the rumor, sell the news’ scenario. Since then, the token has been on a downward spiral and the pain may not be over yet.
Litecoin volume drops after the halving
Litecoin volume since the halving was lower than expected. While investors expected an increase in demand for the LTC token with the reduced supply, the opposite was the case. Instead, the cryptocurrency’s daily trading volume continued to decline.
On the last day, Litceoin’s daily trading volume fell another 23%. This brought the daily volume to $255 million, a significantly low figure compared to the $500 million daily volumes the cryptocurrency recorded in the run-up to the halving.
LTC daily volumes drops 23% | Source: CoinMarketCap
Like the trading volume, the price of LTC has also fallen significantly. From its pre-halving peak of $112, the altcoin has fallen more than 50% to current levels just above $60. This means that the asset has lost all its gains accrued between June and July 2023, just one month after the halving was completed.
So instead of being a bullish event as initially expected, the halving has proven to be more bearish than most. It also didn’t help that this took place during the bear market and LTC has fallen rapidly alongside larger assets like Bitcoin and Ethereum.
LTC price returns to pre-halving levels | Source: LTCUSD on Tradingview.com
Will the LTC decline continue to $50?
At the current pace, the forecasts don’t look too good for the LTC price. Litecoin has understandably seen a 3% gain over the past day as Bitcoin recovered above $26,000. But by today’s standards, this doesn’t seem sustainable.
The first indicator of this is that declining daily trading volume means interest in the asset is declining. As investors shift to other assets that they believe offer better prospects, this will impact the LTC price and could lead to further downward pressure from here on out. Add to that the fact that the coin’s price is below the 50- and 100-day moving averages, and it’s a recipe for disaster.
If the LTC bulls cannot hold support above $60 and it drops again like it did on September 11, then $50 becomes a very possible landing point. Such a decline would return the price to November 2022 levels and indicate a long-term bear trend for the digital asset.
At the time of writing, the LTC price is still above $62, but the tug of war for control between bulls and bears continues to rage.
