- Analysts from Bitcoin firm NYDIG caution that the upcoming Bitcoin halving could mirror Litecoin’s recent bearish trends, weakening BTC’s price rally.
- The Bitcoin and Litecoin halving cycles have consistently decreased in amplitude with each successive cycle, indicating a diminishing effect on price rallies.
In the world of blockchain, halving events are key moments. These are the times when the reward for mining a block is cut in half, influencing the asset’s price over the next four years. However, industry observers have started to note a shifting pattern in the case of Litecoin, which could foreshadow a similar outcome for Bitcoin.
Litecoin’s Bearish Halving Effects May Foretell Bitcoin’s Future
Litecoin’s price has seen an impressive surge to a multi-month peak just weeks before its halving event, with the event itself acting as a trigger for a ‘buy the news, sell the rumor’ scenario. Unfortunately, LTC’s price plummeted in the halving’s aftermath. NYDIG, a Bitcoin company, suggests this may be an emergent trend, predicting a similar weakening effect for the approaching Bitcoin halving.
The Bitcoin halving is a landmark that traders and market participants eagerly anticipate. This event, which occurs every four years, halves the mining reward associated with a BTC block and effectively curtails the volume of BTC circulating in the market. By the law of supply and demand, this reduced supply should, in theory, drive prices upward. But an emerging pattern suggests this may no longer hold true.
NYDIG experts point out that over the past two halving cycles, both the low-to-high and high-to-low returns have demonstrated a weakening trend. This trend was also evident with Litecoin, an asset originating from a fork in the Bitcoin blockchain.
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Litecoin’s past two halvings failed to instigate a price rally for LTC, rather they resulted in a substantial decline in market capitalization as the asset’s price dropped post-event.
Facing the Future If Halving No Longer Boosts Prices
The year 2023 has seen Bitcoin’s price rally more influenced by macroeconomic events and its correlation with US tech stocks than by the last BTC halving. Should future halving events prove insufficient to boost BTC prices, investors will likely place greater emphasis on these factors to predict the cryptocurrency’s trajectory. This shift in market dynamics could mark a new era for Bitcoin and potentially the broader crypto market.
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