Two days ago, Litecoin underwent its halving exercise which meant they reduced the reward from mining the coin by 50%. It has been said that markets had priced in the event leading into August 5th (exercise date) and price volatility might be minimized and during the session, the price spiked but quickly pared the gains. The reason for this is said to be that miners ramp up operations to maximize the process and then sell the coins at a higher price just before the halfling point.
So what is the point? Charlie Lee wants to reduce the volatility of LTC in the long term. He said by reducing supply it will inherently increase demand. He also believes that having only serious players in the Litecoin space longer term will increase its stability and reduce its volatility for it to be used as a real currency. LTC peaked to its highs after the last halving event in July 2015 but soon after it dropped 75% in the coming sessions.
So what happened this time round?
So at the event, the LTC/USD price spiked through the 100 level to reach 107.04 and subsequently sold off. The Cc Charlie Lee said the coin would take 3 or so days to settle but it seems the volatility has dropped off and we hold above the 23.6 fib support level.
Interestingly the RSI indicator made a lower high while the price made a higher high which is called bearish divergence. This normally indicates bearish price action ahead so keep a firm eye on a break of the 87.30 support level. Over the last few weeks, the price has consolidated between 105 and 87 but this came after a heavy downtrend from 146.00.
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