Litecoin price experienced a significant drop to its August low of $81.64 following the block reward halving event, which was contrary to the reaction the crypto community expected as has been with Bitcoin halvings.
Although Litecoin and Bitcoin halvings are often regarded as comparable events, LTC’s price plummeted by nearly 13% in response to the mining reward halving.
In contrast to Bitcoin’s typical response to BTC halvings, two consecutive Litecoin halvings have exhibited a pattern of ‘buy the rumor, sell the news’ events. This has been a similar case in the recent halving which reduced the block mining rewards to 6.25 LTC.
The halving event which took place on August 2 was followed by a notable sharp decline in LTC price on Coinbase. Litecoin’s value fell from its Wednesday peak of $94.61 to the $81 demand zone. Interestingly, in the days leading up to the halving, prominent wallet investors had accumulated a considerable number of LTC tokens in anticipation that the price would increase.
LTC Price Risk of More Losses to $71
After turning down from the $115 high on July 3, the LTC price has recorded a series of lower highs and lower lows. This has led to the formation of a descending parallel channel on the daily chart as shown below.
At the time of writing, the lower boundary of the channel provided support for the proof-of-work (PoW) token at $81.6. Note that a daily candlestick close below this level would confirm a bearish breakout from the governing chart pattern. This would set the coin on a freefall toward the June 16 swing low at $71, representing a 14% drop from the current price.
LTC/USD Daily Chart
Apart from the technical pattern, Litecoin’s gloomy outlook was also supported by the position of the Relative Strength Index (RSI) at 35 within the negative region. This reinforced the bears’ grip on the LTC price.
On the other hand, Litecoin price has to produce a daily candlestick close above the $88 and $93 supplier congestion zone, where all the major SMAs and the upper boundary of the falling channel sit, to bring an end to the downtrend.
If this happens, it will invalidate the bearish thesis with the LTC price escaping from the prevailing bearish chart pattern. Key levels to watch on the upside would be the $95 level as well as the $100 psychological level.
