The “Silver to Bitcoin’s Gold” marks 2023 low as Litecoin price slides by 12% owing to BTC crash
|- Litecoin price is trading at $65 after suffering a bearish week, with most of the impact felt in the past 24 hours.
- As Bitcoin price crashed to $26,000 on August 17, LTC dipped too, resulting in over $17 million worth of long liquidations in a day.
- The altcoin has already been facing a lack of participation from investors, which could intensify if LTC falls to December 2022 lows.
Litecoin price is witnessing an unfavorable month treading lower with every passing day. The altcoin is famous for being secondary to Bitcoin, but it seems like that label is doing more damage to the cryptocurrency than good.
Litecoin price marks new YTD lows
Litecoin price is trading at $65 at the time of writing; however, during the intra-day trading hours, the altcoin almost fell to $60 before bouncing back. LTC is observing year-to-date lows with this decline and is even close to hitting December 2022 lows. The reason behind this is LTC’s association with Bitcoin.
LTC/USD 1-day chart
Known as the “Silver to Bitcoin’s Gold,” LTC follows the biggest cryptocurrency’s cues religiously, no matter what goes on in its own ecosystem. This affiliation is currently impacting Litecoin price negatively as Bitcoin crashed earlier in the day due to Elon Musk’s SpaceX selling all its BTC, resulting in FUD (Fear, Uncertainity, Doubt).
With Bitcoin price at $26,000, Litecoin price is also suffering, and the impact can be seen on not just the investors but traders as well. Following the crash, the crypto market observed over $850 million worth of long liquidations, and LTC traders also registered over $17 million in similar liquidations. These are the most long liquidations witnessed by LTC traders in over three months.
Litecoin long liquidations
These liquidations and the speculation of further decline could result in Litecoin price slipping further on the charts and even falling through the December 2022 lows of $63, acting as the critical support line at the moment.
As is, LTC has been suffering due to the lack of participation from investors for a while now. Presently, some 263k addresses are actively conducting transactions on the network. However, Litecoin has seen lower participation this month as the seven-day average places this week’s figure at a three-month low.
Litecoin active addresses
Put simply, going forward, higher participation from Litecoin investors is crucial to the altcoin’s recovery. If that happens, Litecoin price could bounce back above $69, which would support a recovery to $77 and beyond.
Litecoin halving FAQs
When is the next Litecoin halving?
Litecoin’s third block halving event is scheduled to take place at a block height of 2,520,000, which is estimated to happen around August 3. The current block height is 2,511,587. The first halving took place in 2015 after the block height was 840,000. The second Litecoin halving event occurred in 2019 when the total block height hit 1,680,000. This event takes place roughly once every four years.
What will be the new block reward after the third Litecoin halving?
Halving is an important event for both miners and investors. After halving, the block rewards are slashed in half, as the name suggests. The first halving event in 2015 reduced the block reward from 50 to 25 and the second one in 2019 halved it to 12.5. The third halving, which is scheduled on August 3, will further reduce it to 6.25. This means that miners will go from receiving 12.5 LTC for mining a block to 6.25 LTC after the third halving.
How will halving affect Litecoin price?
After a halving event, the emission of LTCs is cut in half, which effectively triggers a reduction in the Litecoin supply. If the demand remains more or less the same, it creates a negative supply shock. The same dynamics are seen if the demand for LTC increases. Due to the reduced supply and high demand, it would trigger a rally in Litecoin price. But traders often anticipate this trend and try to get an exposure to LTC before the halving, causing a premature rally and a sell-the-news drop on the day of the event.
Why is Litecoin halving important to LTC holders?
Following a halving event, miners receive 50% fewer rewards for every block they mine and this creates scarcity in the altcoin, reducing the circulating supply of the asset. The event’s purpose is to control the inflation rate of Litecoin. Halving is therefore a key event that influences the asset’s price and market capitalization over time.
How different is Litecoin halving from Bitcoin halving?
From a technical perspective, it is not any different. But from an investor and miner perspective, there are lot of differences. For example, the concept of halving remains the same for both assets, but due to relatively lower total supply of 21 million and first-mover advantage, Bitcoin’s network effect and large market capitalization as a result has a significant impact on the crypto ecosystem as compared to Litecoin. Additionally, the effect of halving events is more pronounced for Bitcoin, because of the asset’s dominance, hence BTC halving receives more attention.
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