Litecoin has dropped below $70 for the first time in four months. Early this month, the fifth-largest cryptocurrency in market experienced its halving, dropping the block rewards from 25 LTC per block to 12.5 LTC per block. However, the price fall began well before the halving, a trend which flies in the face of conventional cryptocurrency wisdom.
Bitcoin, the premier digital asset is on the run-up to its 3rd halving. In May 2020, the Bitcoin block rewards will drop from 12.5 BTC per block to 6.25 BTC per block. Based on previous halving scenarios, the price of a digital currency on the road to its halving will surge roughly three months to one year prior to the halving.
The price of Bitcoin has tracked this historical trend, surging from $4,000 to over $13,000 between April to June 2019, albeit, the price has slipped to $10,000 and in the past 24-hours a dip of over $1,000 has triggered a massive altcoin sell-off as well, with Litecoin one of the top coins to be offloaded.CUP AND HANDLE:
A pattern beginning to form on the LTC weekly chart as well as making the round on crypto-Twitter is that of the ‘Cup and Handle.’ Although, in its infancy, the pattern is quite clear, especially given the larger perspective of the Litecoin price in 2019 alone.
Owing to the anticipation of the halving, the price of Litecoin began to surge since the beginning of the year, breaking into its infamous ‘Golden Cross,’ during the end of March, and peaking at over $140 per digital silver, in June, forming the ‘right lip.’ Since then a major LTC sell-off was seen, as the prices began to slump quite acutely, forming a notable downtrend, or the handle for the cup.
Back in April 2018, when the crypto-winter induced slump began, Litecoin was trading at under $175, forming the left lip. The bearish 2018 dropped the price of LTC to below $25, during December 2018, as the collective cryptocurrency market cap was valued at just above $100 billion, and Bitcoin was priced at $3,100.
Once the bottom was found, Litecoin began a consistent surge lasting well over 6 months. The most prominent rise was seen at the start of April as Bitcoin surged by over 17 percent on April 2nd, causing an altcoin frenzy in the process. As mentioned earlier, the right lip was formed in late June as the price reached $144, just $30 short of the April 2018 left lip of $171.
The ‘handle,’ began to form owing to four consecutive weeks of bearish price swings. From the last week of June to the final week of July the price dropped by $34.48 as the excitement for the halving turned to anxiety and then dread. This slump continued during and after the halving, leading to a slump below support levels placed at $78, $75, $72 and finally at $$70.
At press time, Litecoin is trading at $64.82, with a continuation of this bearish slump looking highly likely. To compound the same, the Relative Strength Index is also caught in a similar descending channel, indicating a decline in investor interest.BUMP and RUN Reversal [BARR]:
Another key sign of Litecoin’s continued bearish slump is the failure to run from the bump. The weekly chart further points to Litecoin’s inability to add on to the bump reversal as seen during the second week of June, instead beginning a downtrend. The bump was seen after a massive resurgence from the lows of 2018, as digital silver saw massive gains at the start of 2018, and then u-turned quite strikingly.
Following the continued bullish movement in June, a move up was envisaged [comparable to the Bitcoin breakout during early-April] but instead, digital silver fell into a descending channel, which has dropped the price from the highs of $140 to the lows of $60.
Given the above two projections, a breakout in the positive direction is unlikely. The price is likely to drop further, as both technical and fundamental indicators are looking quite bleak for the coin, and the slump looks to prolong.