In a recent tweet, Santiment, the leading cryptocurrency data analytics platform, has stirred up increased trader enthusiasm in anticipation of Litecoin’s upcoming halving event scheduled for August 2nd.
Over the past 24 weeks, as awareness of the halving has spread, there has been a noteworthy surge in the creation of new cryptocurrency addresses holding at least 100 LTC.
According to Santiment’s data, a staggering 1,185 new addresses have been generated during this period. The influx of interest is seen as a positive sign by most investors, as it indicates growing confidence in Litecoin’s potential to perform well following the halving.
For those who may be unfamiliar with the concept, a halving is an essential aspect of Litecoin’s protocol. It occurs approximately every four years and involves reducing the block rewards that miners receive by 50%.
Consequently, this reduction diminishes the rate at which new Litecoin is created. This phenomenon often leads to potential supply constraints and historically contributes to an increase in Litecoin’s value.
Cryptocurrency enthusiasts are awaiting a bullish trend for Litecoin after the halving event. This anticipation is based on historical price movements observed during previous halvings of other cryptocurrencies.
Reducing the rate of new Litecoin being mined is expected to create scarcity and could potentially drive up demand, thereby positively impacting its market value.
With the upcoming halving of Litecoin generating increasing interest, market participants are closely monitoring its price movements and gauging investor sentiment.
Nevertheless, as the halving date approaches, the crypto community is eagerly waiting to witness how this event will unfold and what impact it will have on LTC’s overall market performance.
Litecoin Price Analysis
Litecoin’s upcoming halving event, where the miner’s block subsidy will be halved, has led to speculation among traders about the impact on LTC’s price, currently trading at $94.36.
The coin has experienced a 19% decline in the past 18 days but still maintains a 31% positive performance this year, buoyed by a 34% rally between June 29th and July 2nd, reaching a 14-month high of $115.
However, a concerning statistic from the derivatives market hints at a potential sharp correction. Historically, when Litecoin futures’ open interest dropped below $500 million, it caused price drops of 38% or higher, similar to the current scenario.
Despite a surge in demand for leveraged futures contracts, the risk of a sharp correction remains due to buyers adding a margin to avoid liquidation. This situation could lead to larger price swings and potential liquidations in the future.
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