This scam crypto could have explosive bullish potential in 2023

This scam crypto could have explosive bullish potential in 2023

At a time when the price of almost every cryptocurrency is going down, Litecoin (LTC 0.13%) Recently seen an increase in value. Litecoin It has risen by more than 30% over the past 30 days, and as a result, it has become the 13th largest cryptocurrency by market capitalization. For comparison, bitcoin (BTC -0.15%) decreased by 17% and Ethereum (ETH 2.47%) It decreased by 15% over the same time period. Obviously, Litecoin’s recent price performance is worth a closer look.

The main driver of this one-month rally could be related to the upcoming “halving” of Litecoin, which is tentatively scheduled for August 2023. With less than a year to go, investors may be setting themselves up for a huge breakout move to the upside. Each Litecoin is accompanied by a halving. Let’s take a closer look at what this means if you’re thinking of buying Litecoin.

The significance of the half

When Litecoin was originally created in 2011, it was designed as a form of “Bitcoin Lite”, hence the name. While there are some major differences between these two cryptocurrencies, one feature remains unchanged: halving. This refers to the change in the rate at which new coins are added to the existing circulating supply. Roughly every four years, the rate of new coins being added drops by exactly half. The first halving of Litecoin took place in 2015 and the second in 2019. All of this is programmed algorithmically, and no one can change the schedule.

Image source: Getty Images.

So why is all this important to traders? First of all, it gives them an easy way to time the market. They know that halvings happen every 4 years, and they can prepare accordingly. Since the last halving of Litecoin took place in 2019, the next halving will happen in 2023, most likely in August. Secondly, the computationally accurate nature of the two halves makes it easy to model supply and demand for Litecoin.

Best of all, traders now have historical data to study. When Litecoin was launched in 2011, the impact of the halving was purely theoretical. The goal was to make Litecoin shrink over time. It sounded good on paper, but did it really work in practice? Based on evidence from Litecoin in 2015 and 2019, there is a fairly predictable pattern of what will happen: Litecoin will increase in value heading into the halving and then rapidly increase in value thereafter.

Keep this in mind before investing

Of course, cryptocurrency markets are prone to extreme price fluctuations, so don’t expect a smooth upward curve for the Litecoin price heading into August 2023. According to technical traders who study chart patterns to understand how the cryptocurrency will perform in the future, the main factor to consider is that it looks There is a historical price correlation between Litecoin and Bitcoin. This relationship cannot get out of alignment or the market will automatically correct. In other words, if Litecoin starts to rally and Bitcoin can’t keep up, there will inevitably be a price correction.

So you need to be careful about adding Litecoin to your wallet. Given that Litecoin seems to be overheating at the moment, there may be a price correction before the end of the year. The consensus estimate for Litecoin price for December is $58.36, which is a 24% retracement from the current level of $77.15. But some warn that the correction could be much stronger, by as much as 50% from current levels.

Should I buy Litecoin?

In many ways, Litecoin is a scam crypto game. Most investors focus on bitcoin And maybe ignore Litecoin. Furthermore, since Litecoin is a form of “Bitcoin Lite”, many casual investors may assume that both coins will trade in the same way. However, based on what we’re seeing now, Litecoin has the potential to trade very differently from Bitcoin. Over the past month, for example, Litecoin has increased in value, while Bitcoin has fallen.

Heading into 2023, Litecoin is clearly worth a look, especially if your cryptocurrency portfolio only needs one winner at the moment. I’m tracking to see how Litecoin performs through the end of the year and then it may start accumulating in early 2023, hoping to ride the growing momentum. If this trade works out, I’m definitely jumping on the cryptocurrency bandwagon for the Bitcoin halving in 2024.

Dominic Basolto He has positions in Bitcoin and Ethereum. The Motley Fool has and recommends posts on Bitcoin and Ethereum. The Motley Fool has a file Disclosure policy.

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