Litecoin’s price is experiencing a downturn, partially influenced by the “sell the news” sentiment following its halving on August 2. The crypto market as a whole has also seen a decline, with Litecoin’s price dropping over 1.5% on August 16 to approximately $78.25, underperforming the broader market’s 0.65% drop. This downward movement aligns with a larger trend of correction that started in early July.
Sell the News Effect from Halving
Litecoin’s correction began about a week ahead of the broader market’s decline. This was attributed to an overbought relative strength index (RSI) and waning buying sentiment leading up to the halving. Since crossing the RSI’s overbought threshold of 70, Litecoin’s price has fallen by more than 30%. Even when measured from the halving day, the price has dropped by 16.45%, indicating the “sell the news” effect extending into the recent bearish session.
LTC/USD vs. crypto market’s daily performance chart. Source: TradingView
Strong “Hodling” Sentiment Amid Selloff
Despite the selloff, data tracking addresses that have held Litecoin for over 155 days (hodlers) indicate a persistent accumulation sentiment. The monthly Hodler Net Position Change metric turned positive on July 23, signaling the bullishness of long-term investors. However, data from Santiment suggests that larger Litecoin holders, or whales, have been driving the ongoing selloff.
Historical Pattern and Price Outlook
Analysts note that the current Litecoin selloff following the halving is a typical event historically. The coin usually undergoes a retracement before establishing an “accumulation range” and eventually rebounding to set new record highs. Rekt Capital, an independent market analyst, points out that Litecoin has historically retraced by -73% to -83% after a halving event before entering an accumulation range. Based on this pattern, Litecoin’s price could potentially fall to around $40 in the coming months.
LTC/USD daily price chart. Source: TradingView
Technical Indicators and Q3 Price Projection
Despite the recent dip, technical indicators suggest a more optimistic outlook for Litecoin’s price. It is currently within a falling wedge pattern, indicating the potential for a bullish reversal. Falling wedges usually break out to the upside, with an estimated price rise between $83.25 and $95.75 by October. This would be a 6% to 20% increase from current levels.