In August, Litecoin will experience another halving event. The price of Litecoin has increased significantly in the previous two halving cycles. According to crypto expert Dominic Basulto, profiting from a Litecoin halving rally takes a significant amount of market timing. Therefore, the analyst considers it not suitable for long-term investors.
According to analysts, Litecoin price will rise 200% in a short time!
As you follow on Kriptokoin.com, the next Litecoin halving will take place in August. This makes investors excited about the future upside potential of this cryptocurrency. Litecoin, seemingly out of nowhere, is on the move again. The coin has surged 13% in the last seven days after performing significantly below market for most of the year. During the same period, both Bitcoin and Ethereum were basically sideways.
Why the sudden price action in Litecoin? There is a potentially important catalyst that will happen in early August. A few different factors are at work here, including this one. As a result, some analysts are now suggesting that Litecoin could rise as high as 200% in the next three months.
‘Litecoin could soon be parabolic’ narrative
This narrative is based on an upcoming event known as the halving, scheduled for August 3. In the event of halving, the reward paid to crypto miners for mining a new block on the Blockchain is halved. For example, Litecoin miners are currently rewarded with 12.5 Litecoins each time they mine a new block. On August 3, this reward will drop to 6.25 Litecoin.
This halving is often seen as too bullish for Litecoin’s future price due to its impact on the circulating supply of crypto. For example, Litcoin has experienced two halving events before. Each time, LTC price saw a huge increase before the actual halving date. From an optimistic point of view, there could be an increase of up to 200%. This figure was derived from analyzing the two previous halving events and examining price action before and after the actual event.
The problem is, there is quite a bit of debate in the crypto world about how long such a rally will last, when it will actually start, and how big of a price increase there will be. For example, when Litecoin saw a rally at the end of 2022, many thought it was the beginning of the 2023 halving rally. But it turned out to be a head fraud. However, the current consensus is that the Litecoin halving rally will start about 100 days before the actual halving date. If you check your nearest calendar, you should see that the rally should have already started. Which probably explains why Litecoin has soared over the past week.
Problem with market timing
But as can be seen, getting Litecoin’s halving right takes a significant amount of market timing. If you enter too early or too late, your returns are likely to vary drastically. For example, the peak of any Litecoin halving rally occurs approximately 50 days after the halving date. Therefore, there is a very limited time to fully profit from any Litecoin rally. According to my calculations, if you don’t hold Litecoin by mid-June, you may be very disappointed with what you get compared to what was promised. Some even suggest that the rally may not happen.
As a long-term trader, you should ideally not focus too much on such short-term trade setups. Instead, you need to look for long-term catalysts that are likely to result in future price gains. So even if you miss a short-lived halving, there are many other possible ways you can walk away with a winning investment.
Are there other Litecoin catalysts?
That’s why I’m particularly worried. I don’t think Litecoin has the right kind of long-term catalysts. For example, some investors are suggesting that the imminent introduction of the new LTC-20 token standard will lead to a rally in Litecoin. However, from my point of view, this is a last minute attempt to monetize the buzz around the BRC-20 token standard for Bitcoin. In case you haven’t heard, the BRC-20 token protocol has created a meme-coin frenzy around Bitcoin. So are we really saying that the future of Litecoin lies in meme-coins?
Admittedly, there has been some improvement in Litecoin’s fundamental metrics, which is very encouraging. For example, the number of daily active addresses on the Litecoin Blockchain recently hit an all-time high. The number of daily active transactions is also at an all-time high. However, this is probably a result of the recent congestion in Bitcoin, where transaction fees are rising. It is possible that people are switching to Litecoin in the short term until Bitcoin settles things down. So, I don’t think there is a long-term catalyst here, just a short-term market anomaly.
So, does it make sense to buy LTC?
If, after reading all this, you are still convinced that you should attend the Litecoin summer rally, I have five words to say to you: “Bitcoin will also halve soon.” Yes, Bitcoin as a PoW crypto also has a halving event every four years. The next halving is scheduled for April 2024.
So forget the Litecoin halving in 2023 and wait for the Bitcoin halving in 2024. Bitcoin is a much better long-term investment than Litecoin. Even if a big halving rally for Bitcoin doesn’t happen, you won’t regret it. There are plenty of other long-term catalysts that will push Bitcoin higher.
The opinions and recommendations in the article belong to the experts and are not investment advice. We recommend that you do your own research before investing.
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