Litecoin is about to undergo a halving, market indifference and future outlook analysis

Original Title: “LTC is About to Halve, Market Indifference and Future Outlook Analysis”

*Original Author: Alex, * Scimitar Capital

Original Compilation: Deep Tide TechFlow

Although the halving event for Litecoin is approaching, the market's attention seems to be low, raising concerns about its future. In this article, researcher Alex will explore the psychology of the halving event, whether Litecoin still needs to exist, and the market's reaction to it. Here is the original text:

I have studied Litecoin and its upcoming halving event, which is about 70 days away, so the main point of this article is: the psychology of the halving event and whether Litecoin still needs to exist.

First, let's look at the historical background:

Litecoin was created in 2011 based on Bitcoin, with faster block times and a different mining algorithm. Like Bitcoin, Litecoin halves its block reward every 4 years to reduce inflation and increase scarcity.

Why is the halving event bullish?

First, because the miners' rewards are halved, which reduces the structural selling supply. Reduced selling = price increase, it's that simple.

After experiencing three Bitcoin halving events, the price has shown a parabolic upward trend, and most people associate the halving event with bullishness. The best narrative should be able to attract people of various IQs.

Is the halving event always bullish?

Not necessarily.

Since the halving event reduces the number of rewards, it decreases the diversity of participants who can profit and protect the network. Therefore, all else being equal, each halving event increases scarcity while weakening the security of the network.

When people bid for the halving event, they are essentially voting on the confidence that the network's security is worth protecting.

Now let's take a look at Litecoin's halving event.

With less than 70 days until the halving event, we have not seen strong interest from people towards it. Previous Litecoin halving events peaked in price about 50 days before the halving.

We cannot infer from two data points from completely different tokens. But the foolishness of cryptocurrency has never stopped, the indifference towards the Litecoin halving event may be a sign that the network's security is not worth saving. Since 2019, more innovative cryptocurrencies have emerged in the market, leaving poor Litecoin behind.

But to be honest, I don't think Litecoin is ready to disappear. When I talk to most people, they support the halving event; they just haven't seen a strong Schelling point to get the bulls in.

Meanwhile, since the launch of LTC-20 (a branch of the BRC-20 token standard on Bitcoin) on May 3, Litecoin's on-chain activity has been quietly increasing. The trading volume in the past week has been higher than ever.

Litecoin also set a historical high for active addresses last week, with its own various LTC-20 tokens for speculators to gamble on.

There is a disconnect between the attention generated on-chain and the indifference in price behavior.

Now may not be the right time to take risks on altcoins, as altcoins have been slaughtered in the past few weeks.

But this also means that competition with other narratives has decreased.

Now may not be the right time, but I think if the market decides to save Litecoin, the timing is getting close.

If nothing happens in the next 100 days, I think this will be a good signal that other dinosaurs are gradually losing influence.

*Disclaimer: I hold a position hedged against Bitcoin because I believe it is a fairly good risk/reward investment. This does not constitute investment advice; please do your own research.

Disclaimer: This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances and comply with the relevant laws and regulations of their country or region.