Just like Bitcoin, Litecoin experiences a halving event every four years. The next Litecoin halving will take place in August 2023. Investors are already predicting the gains that typically accompany each halving event for Litecoin. However, investors don’t seem to have much hope for their favorite DOGE or SHIB. Crypto expert Dominic Basulto explains if and when LTC can hit $100.
Litecoin explodes, not DOGE or SHIB
After the collapse of crypto exchange FTX, Litecoin (LTC) is currently one of the only cryptocurrencies to rise. cryptocoin.com As you follow, Litecoin has risen more than 40% in the last 30 days. However, traditional cryptos such as Bitcoin and Ethereum fell by about 25% over the same time frame. Moreover, it has outperformed popular altcoins like DOGE over the same time period.
Litecoin is currently trading at around $78. Also, given its recent trajectory, some traders are already suggesting that Litecoin could reach $100 in a few months. This means another increase of about 40%. It may sound too optimistic. However, there is a major catalyst that will make this higher price target possible over the next year.
Key catalyst: Litecoin halving
Experts predict that the main driver of recent price increases will be halving. Halving is one of the most interesting features of a Proof-of-Work (PoW) cryptocurrencies like Litecoin. In a halving, there is a change in the crypto supply determined by an algorithm. This directly affects miners. Because the reward for generating new cryptocurrencies is halved. Currently, Litecoin miners earn 12.5 coins each time they successfully mine a new block. In August 2023, this figure will change to 6.25. In 2027, this figure will change to 3,125. The net result will be a slower growth of the Litecoin supply over time.
Just like Bitcoin, Litecoin experiences one of these halvings every four years. Also, both of these events have triggered a rally in Litecoin in the past (in 2015 and 2019). As traders have pointed out, Litecoin has shown a similar pattern in past halving events. That is, a market bottom, followed by a gradual increase in price in the timeframe leading up to the halving. Afterwards, there was a rapid price increase that continued for a long time during the halving.
It makes sense to think about crypto mining in the same way as gold mining. In this way, the impact of the halving on the price becomes intuitively clear. Imagine what would happen if every four years the world’s gold miners announced that they could mine only half as much gold from their mines in the future. It will naturally tend to increase the price of gold. In many ways, this is the same phenomenon that is happening with Litecoin right now.
Litecoin overheating?
The only problem, of course, could be Litecoin overheating. So many crypto investors are now piling on Litecoin that they are raising the price of Litecoin too much, too fast. For example, Litecoin exploded by 75% in a two-week period. In a 24-hour period, $1 billion flowed into Litecoin. Therefore, according to experts, it is difficult to maintain this for a long time.
In relative terms, Litecoin is currently trading at a one-year high against Bitcoin. Therefore, some traders are waiting for a correction by the end of the year to realign Litecoin and Bitcoin prices. How big will this fix be? On CoinMarketCap, crypto enthusiasts now estimate the year-end price at $58.36. Crypto traders are now expecting a price of $55.23. Therefore, a price correction of 25% or more is possible.
Before DOGE goes to $1, will Litecoin see $100?
Therefore, the most likely scenario is that Litecoin will lose some of its current momentum. It also includes that the scenario will retrace some of the recent price increases. This pretty much eliminates the possibility of Litecoin hitting $100 by the end of the year. So Santa won’t be stocking your socks off with Litecoin crypto earnings in 2022.
What about 2023? This is when Litecoin has the greatest chance for a long and sustained rise. Also, this is the pattern we saw at the previous two Litecoin halvings. Moreover, there is no reason to think that this time will be different. As a long-term buy, Litecoin makes sense. There is historical evidence of price increases prior to similar events as well as a known catalyst. In the meantime, don’t overlook the potential positive psychological impact of finally saying goodbye to a very painful year for crypto investors.
