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June 27, 2019
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litecoin price analysis

Litecoin (LTC) Back in the Driver’s Seat as Accumulation Reaches All-Time High

Litecoin (LTC) extended its bullish breakout Monday to lead the cryptocurrency market past $275 billion for the first time in eight months. The so-called silver to bitcoin’s gold is riding a four-day winning streak, having broken out of a major holding pattern that had taken the sails out of the year-long bull market.

LTC/USD Update

The Litecoin price peaked at $122.16 on Bitstamp, registering a new high for the year. The fifth largest cryptocurrency by market peak was up by as much as 20% earlier in the day. It was last seen trading just north of $113, up more than 12%.

Litecoin has been in heavy accumulation since early February, right around the time the cryptocurrency began its parabolic surge (more on that below). According to the accumulation/distribution (A/D) line, more and more investors are buying Litecoin instead of selling. The A/D line is currently at record highs and continues to grow. The volume-based indicator suggests demand for Litecoin is very high.

LTC/USD
Litecoin (LTC/USD) continues to surge as buy-and-hold positions build. | Source: TradingView.

Not unsurprisingly, Litecoin’s latest run up has pushed the RSI into overbought territory. Any RSI above 70 means that the market could experience a broad pullback relatively soon.

Litecoin Halvening on the Horizon

Over the past two weeks, we’ve talked at length about the impact of bitcoin’s next halvening event on the underlying price and broader market. But BTC isn’t the only coin about to see its inflation rate cut in half.

In roughly 70 days, Litecoin will undergo its next halvening event, which lowers the mining reward to 12.5 LTC from 25 LTC currently. With nearly 74% of Litecoin’s total supply already mined, the slashing of the block reward could have a significant impact on the price. At the very least, one would expect the same laws of economics to apply to Litecoin as to bitcoin.

Bitcoin usually rallies up to a year from its quadrennial halvening and continues to accumulate for at least a year after the paradigm-shifting event. For Litecoin, its first halvening event back in August 2015 had a fairly subdued impact on price, although we observed a very long green candle just before the event. It would take another year-and-a-half before LTC began its parabolic surge, which occurred in lockstep with the broader market.

But Litecoin is already one of the top-performing cryptos of 2019 and was among the first to lead the market’s explosive breakout back in early February. Litecoin’s massive rally since February is a clear indication that market participants are already preparing for the next halvening.

At current values, LTC is still a ways off its record high, which was last set on December 19, 2017. The cryptocurrency peaked at $375.29, according to CoinMarketCap. Even with the crippling bear market priced in, Litecoin’s lifetime ROI is 2,543%. New yearly highs could become commonplace as we head into August.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock. Charts via TradingView.

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