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Litecoin Halving Sell-Off: Will the LTC Price Crash History Repeat Itself?

3 mins
Updated by Ryan James
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In Brief

  • Litecoin price rose 5% to retest $100 on Tuesday morning, but historical data suggests LTC will likely retrace as the halving date draws closer.
  • With the Halving date now 21 days away, LTC Miners have surprisingly offloaded 90,000 coins in July, taking advantage of the current high Litecoin prices.
  • Aggregate order books of exchanges also reveal that sell orders are rapidly outpacing LTC buy orders.
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Litecoin price rose 5% to retest $100 on Tuesday morning. However, historical data suggests LTC will likely retrace as the Litecoin Halving date draws closer. Are Miners already in sell-off mode, anticipating some tough times ahead?

The much-anticipated Litecoin Halving is slated for August 2, 2023. Despite the 5% price surge this week, major stakeholders across the LTC ecosystem appear to be taking bearish positions.

Historical on-chain data reveals Litecoin’s unremarkable “price crash” trend in the weeks preceding previous halvings in 2015 and 2019. 

Ahead of Litecoin’s first-ever Halving event in 2015, LTC price peaked at $7.54 on July 10 before sliding 42% toward $4.40 on the August 5, Halving date. 

A similar pattern occurred during the 2019 cycle; LTC price peaked at $142 on June 23, 2015, before declining 53% toward $93 on the halving date of August 5. The post-halving downtrend continued for a few months before Litecoin entered another rally in January 2020. 

Will history repeat itself again this year? 

Litecoin Miners Have Been Depleting Reserves in July

After adding 300,000 coins in June, Litecoin miners started depleting their LTC reserves in July. IntoTheBlock’s Miner Reserves data shows that between July 5 and July 11, Litecoin miners have offloaded 90,000 coins.

Litecoin Miners Sell-off | Miner Reserves Data, July 2023
Litecoin Halving Sell-off | Miner Reserves Data, July 2023 | Source: IntoTheBlock

Miner Reserves tracking real-time changes in the wallet balances of recognized miners and mining pools. When miners deplete their reserves, as seen above, it indicates that they are looking to book profits at the current prices. 

The chart above shows that despite the recent LTC price surge, the miners have taken a bearish position ahead of the halving event. 

Historical price data from 2015 and 2019 shows that LTC price has twice crashed immediately after each Halving. In a bid to front-run the post-halving selling frenzy, many miners often look to offload part of their reserves as the date draws close. 

This has caused LTC prices to crash toward the Halving dates in the past. If history repeats itself, the ongoing Litecoin price rally could be short-lived. 

Crypto Traders are Mounting Sell-Orders Across Exchanges

In further confirmation of the bearish outlook, many Litecoin holders have been piling up orders to sell off their LTC coins ahead of the Halving. 

As things stand, crypto traders have placed 414,000 LTC coins up for sale. Meanwhile, the potential buyers have only placed active orders to buy 411,000 LTC. 

Litecoin Halving Sell-Off | Agg. Exchange Order Books, July 2023
Litecoin Halving Sell-Off | Agg. Exchange Order Books, July 2023 | Source: IntoTheBlock

The Exchange On-chain Market Depth chart shows the real-time price distribution of active limit orders placed across recognized exchanges. 

Currently, Litecoin supply across exchanges exceeds demand by over 3,000 coins. If the bearish momentum grows ahead of the Halving, as historical trends suggest, LTC could enter a major price correction. 

LTC Price Prediction: Possible Decline Toward $80

Given the historical trends and bearish factors identified above, LTC will likely drop to $80 in the coming weeks. 

Litecoin will have to drop below $90 for the bears to be confident of reversal. But, as seen below, 1.26 million investors had bought 11.8 million LTC at the average price of $88.42. 

This group of holders could mount a support buy-wall to avoid slipping into a net-loss position. However, if the bearish momentum grows as expected, Litecoin could decline sharply below $80. 

Litecoin Halving Sell-Off | IOMAP, July 2023
Litecoin (LTC) Price Prediction | IOMAP, July 2023 | Source: IntoTheBlock

Conversely, the bulls could maintain the stronghold if LTC scales the $100 resistance. However, a cluster of 572,000 investors bought 3.63 million LTC at a minimum price of $100.95. They could inadvertently trigger a pullback if they chose to sell off their holdings amid the Halving uncertainty. 

Although unlikely, if the resistance gives way, LTC could hit a new 2023 peak of $120.

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Ibrahim Ajibade
Ibrahim Ajibade Ademolawa is an experienced On-chain research analyst who began his career in Commercial Banking. He has worked with several Web3 startups and financial institutions —analyzing technical concepts and spectacular events that link the DeFi and TradFi worlds. He holds a Bachelors’ Degree in Economics and is currently pursuing an MSc. in Blockchain & Distributed Ledger Technologies.