Litecoin Halving Priced In?

Litecoin's halving takes place later today, with recent price action suggesting it is once again a "sell the news" event.

Litecoin halving

Bitcoin's next halving will take place around April 2024, when block rewards will be cut to 3.125 BTC—bringing the inflation rate down towards 1.4%. Bitcoin halvings have historically proven bullish catalysts, as demand encounters reduced supply.

Litecoin also experiences halvings, with the next one due around 3pm UTC today. However, LTC has typically reacted differently to these events, pricing in the effect before the halving takes place, and then selling off. This appears to have been the case this time around, too.

Later today, Litecoin block rewards will drop from 12.5 LTC (every 2.5 minutes) to 6.25 LTC. However, analysts suggest that this reduced new supply is not likely to provide a bullish catalyst, with the effect already being priced in by traders.

Back before its first halving on August 25, 2015, LTC experienced a run-up of around 800%, peaking before the halving itself. Before its August 5, 2019 halving, it had a 6x run-up from the low, to a high of $136 on June 20, again selling off into the halving.

This time around, LTC climbed to $113 in early July, from a low of $40 in June 2022, but has since fallen to around $90.

However, while Litecoin generally sees a rally and sell-off before the halving, its all-time highs generally align more closely with the overall crypto market cycle, which is driven by Bitcoin.

That suggests that Litecoin may not be done just yet—but that we'll have to wait for Bitcoin to set the schedule for its ultimate top.

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