Litecoin’s Potential Upcoming Dip and Its Implications for Indian Investors2-min read

A Brief Overview

Over the past seven days, the value of Litecoin (LTC) has been fluctuating between $81 (₹6,729.48) and $85 (₹7,061.80). An in-depth analysis of the current on-chain metrics reveals concerns that the price of LTC might dip below $65 (₹5,400.20) in the forthcoming period.

The Influence of Halvings on Proof of Work Blockchains

Halvings play a pivotal role in every Proof of Work blockchain mechanism. These events considerably affect the cryptocurrency’s price and, more crucially, the mining operations.

Recently, on 2nd August, Litecoin experienced its latest halving, post which there has been a noticeable slowdown in its mining activity. The pressing question for Indian investors – both novices and veterans – is whether this will deter prominent investors, further reduce transaction numbers, and cause a steeper fall in its value.

A Dive into the Decline in Litecoin’s Mining Activity

The aforementioned halving event on 2nd August resulted in the mining reward dwindling from 12.5 LTC ($1,000 or ₹83,080) to 6.25 LTC ($500 or ₹41,540). Since operational costs have remained consistent and with resources getting exhausted, several miners have contemplated withdrawing from the activity.

Reports from leading data analytics firm, IntoTheBlock, reveal that as of 30th July, just days before the halving, the LTC Hash Rate was around 826 TH/s (Terahash per second). By 12th August, this rate has seen a dip of close to 8%, resting at 767 TH/s.

For the uninitiated, Hash Rate (measured in TH/s) represents the collective computational power utilised by miners to validate transactions and safeguard a blockchain network. The recent drop intimates that miners are either withdrawing or allocating fewer resources to maintain the Litecoin network.

This decline poses concerns for Indian investors. Reduced mining activity might lead to slower transaction times and compromises in the blockchain’s security measures.

Even though the present LTC Hash Rate is within acceptable limits, it has fallen below its one-month average, hinting at a possible prolonged descent. This can push the Litecoin value below its $80 (₹6,646.40) support threshold.

The Waning Confidence of Major Investors

Litecoin has historically been favoured for its impressive transaction speeds and minimal fees, especially when juxtaposed against Bitcoin. This has made it a favourite among Indian investors, especially those dealing in large volumes. However, the recent halving appears to have cast doubts.

Comparative data reveals that major LTC investors, or ‘whales’, have seen a 44% drop in their trading activities over the past month. If the Hash rate persists in its decline, these key players might further reduce their participation.

It’s important to note that such substantial players offer essential liquidity to the market. A drastic reduction in their activity can lower the LTC price, primarily if traders start undercutting prices for faster transactions.

Litecoin’s Potential Price Point: A Fall to ₹5,400.20 ($65)?

Drawing parallels from historical data, especially from the post-halving trends in 2015 and 2019, the LTC price might experience a slide, potentially touching $65 (₹5,400.20). Data analytics indicate that if the LTC price descends below $80 (₹6,646.40), the next substantial support could be at the $65 (₹5,400.20) mark.

However, on the brighter side, there are rumours in the crypto community about Litecoin miners contemplating dual mining, which includes Dogecoin. If this becomes a widespread practice, it could boost the mining revenues and rejuvenate the LTC Hash Rate. Should this come to fruition, the LTC price might soar beyond the $90 (₹7,477.20) mark. Yet, a resistance might be encountered at that price point, given historical purchase data.

In conclusion, while the Litecoin market presents challenges and uncertainties, Indian investors should arm themselves with accurate data and keen insights to make informed decisions.

Where to Buy Litecoin in India in November 2024

For those interested to learn more on how to buy Litecoin, it is important to consult this guide for a full breakdown on the strategic timing to do so. Litecoin can be traded on the following brokers, available for Indian retail investors: