Litecoin’s halving is a little over a month away, and historically, the cryptocurrency has peaked prior to this recurring event.
But this time very well could be different, as LTCUSD is exhibiting more similarities with a previous point — just before an incredible breakout performance. With a comparable technical setup returning, will the altcoin soar like the last time? Or like past halvings, is the top already in?
The Looming Litecoin Halving Paradox
Ask the average Bitcoiner, and they’ll tell you the same thing. “Wait until after the halving.” After several recurring cycles, a large majority is convinced that the BTC halving alone drives price increases.
Meanwhile, in Litecoin, it’s viewed as a “sell the news” style event where price peaks well ahead of the halving then simply goes stagnant. Yet the LTC halving features the same supply-reducing mechanics, but is shrugged off as not having any positive impact at all.
This creates an ironic situation where either the halving has an impact, or it doesn’t. Instead, the price behavior closely correlated with each halving, could simply be a correlation, not causation.
If that is indeed the case, the market could ultimately face a scenario where Litecoin rallies shortly after its halving and Bitcoin peaks before its — a situation very few would be prepared for. It’s also supported by a slew of technicals
Why LTC Technicals Tell A Very Different Story
The idea is supported by the monthly LTCUSD Stochastic reaching a level not seen since 2017 and a more than 8,000% spike. After reaching overbought conditions, Stoch turned back up indicating a strengthening trend. The same further technical setup is required for a stronger push higher.
However, there is plenty of confluence with other technical signals. For example, the LMACD is crossed bullish and the histogram shows increasing momentum for several months in a row.
Litecoin has also reclaimed the Bollinger Band basis line, a simple 20-month moving average. If it can hold, LTCUSD could make a run to the upper band. In contrast, further tightening in the bands might be necessary before volatility resumes.
If Litecoin can close above the upper Bollinger Band in the coming months, push above the zero line on the LMACD, and revisit overbought conditions a second time after this one, we could have a lightning strike twice situation in LTC.
This chart originally appeared in Issue #10 of CoinChartist (VIP). Sign up for a free subscription.
#Litecoin is gearing up for something special, according to the Stochastic
Reclaiming the Bollinger Band basis is a positive development & $LTCUSD monthly LMACD histogram bullish momentum is growing
Pushing above the zero line should send this soaring – news is coming IMO pic.twitter.com/n7y516lGFs
— Tony “The Bull” (@tonythebullBTC) July 6, 2023
