The price of Litecoin ($LTC) tanked after Litecoin halving. What are the reasons? Will the post-halving drop continue? Find out more.
Key Points:
A 5% drop has followed the highly anticipated Litecoin halving.
Halvings reduce the supply growth of tokens and are often associated with bull runs.
Most price predictions maintain a long-term bullish outlook for $LTC.
The Litecoin ($LTC) halving was expected by many to push the token higher, maybe even over the $100 mark. To the disappointment of many bulls, $LTC dropped by over 5% following the halving and is now trading below $90. In the short-term, the Litecoin halving doesn’t seem to have done the token much good. Will the price recover? Have the long-term Litecoin price predictions changed? Find out in this post.
What Is Litecoin Halving?
Every four years, the Litecoin network undergoes a halving event in the same way as Bitcoin halvings. As Litecoin runs a proof-of-work (PoW) consensus mechanism, its transactions are verified by so-called miners who use computer power to solve complex cryptographic puzzles in exchange for rewards in the form of $LTC. It's via these rewards that the circulating supply of $LTC is increased.
During the halving event, the amount of rewards earned by miners is cut in half, and the most recent halving saw block rewards drop from $LTC 12.5 to 6.25, which will reduce the rate at which the remaining 10 million $LTC tokens from the maximum supply of 84 million are minted.
Litecoin Price Prediction Before Halving
Prior to Litecoin halving, the token had surged by over 50% in one year, and most price predictions were bullish in the short and long term. Cryptopolitan expected a 40% price rise in the coming months, while Changelly was forecasting a near 20% pump. Even the more conservative price predictions didn’t expect $LTC to drop as much as it has following the halving.
Post Halving Price Decrease - Why is LTC Dropping?
The 5% post-halving drop has driven the $LTC price down to $86. It was trading at just above $90 hours before the halving, and many expected it to post decent gains in the hours that followed.
So, why is Litecoin going down? It’s probably due to the following two factors:
The hype around the halving is now over, and the market will need a new bullish event to drive $LTC higher. In the 12 months leading up to the halving $LTC had outperformed the market with a 50% pump. Investors could be taking their $LTC profits knowing that the halving hype is over for another four years.
The whole market is red. Yesterday all global financial markets were shaken by the news that Fitch had downgraded US debt. All major stock market indices dived on the news, and so did the crypto market. Arguably $LTC is being dragged down by general market sentiment as opposed to the halving.
Litecoin Post-Halving Price Prediction
For long-term Litecoin investors, the real question is how the disappointing post-halving performance has impacted the token’s long-term outlook. The market outlook is mixed, with most experts maintaining a long-term bullish outlook while others now predicting a serious crash.
Changelly appears to have turned more bearish on Litecoin in the short term. They expect August to be a tough month for the leading P2P crypto, with an expected 13% drop from its current price. They maintain that $LTC will perform well in the long term and possibly even hit a new all-time high later in the decade.
Cryptopolitan has not adjusted its Litecoin price prediction and expects the token to close out the year well above $100 despite the recent drop.
AMBcrypto has gone full bear on Litecoin. They have set their end-of-year price target at $43, which suggests a 50% price crash, and they see 40% of that crash taking place in August.
Conclusion
The Litecoin halving didn’t go to plan for the bulls. Arguably, the unfortunate timing of the US debt downgrade by Fitch added fuel to the fire that began to burn $LTC’s price after the halving. Most Litecoin price predictions maintain a long-term bullish trend despite the 5% drop after the halving, but AMBcrypto has since turned bearish.