Litecoin, a digital currency similar to bitcoin, has helped lead the crypto market higher in recent months.
Litecoin rose above $125 today, hitting its highest in more than a year as the digital currency benefited from several tailwinds.
The altcoin (cryptocurrency other than bitcoin) reached as much as $128.25, up more than 10% for the day, CoinMarketCap figures show.
At this point, the digital asset was trading at its loftiest level since May 2018, additional CoinMarketCap data reveals.
When explaining this latest rally, analysts pointed to several variables, including litecoin’s upcoming halving and the strength the digital currency has shown over the last several months.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Several market observers emphasized the key importance of litecoin’s halving, which will reduce the digital currency’s mining incentive by 50%, as a major factor driving these gains.
This event, which is scheduled to take place in August, will cut litecoin’s rate of new supply in half.
Charles Hayter, cofounder and CEO of digital currency data platform CryptoCompare, spoke to this development, stating that:
“The halving is acting as a price catalyst.”
Joe DiPasquale, CEO of cryptocurrency fund of hedge funds BitBull Capital, offered a similar point of view, claiming that:
“Litecoin’s resilience and the recent surge are attributable to the upcoming halving.”
Litecoin A ‘Market Leader’
Some analysts took a different tack, focusing on how well litecoin prices have performed over the last several months.
The digital currency has climbed more than 400% since December, when its price fell to less than $23, CoinMarketCap figures show.
“Litecoin has been a leader throughout this recent bullrun,” said Mati Greenspan, senior market analyst for social trading platform eToro.
“It is one of the most well established coins in the crypto market and has very strong fundamentals,” he added.
“Litecoin has consistently been a market leader since the crypto market hit bear market lows in late 2018,” said Jon Pearlstone, publisher of the newsletter CryptoPatterns.
As a result, the altcoin’s “breaking out” “above recent highs before Bitcoin and other large altcoins is consistent with prior bull moves.”
Next Price Targets
Following litecoin’s recent gains, a handful of technical analysts weighed in on what’s next for the altcoin.
“Breaking the $120 price level was crucial for Litecoin since it had failed to surpass that resistance twice recently,” said DiPasquale.
“Now, with LTC trading around $125, we can expect a steady rise towards $150 with some normal pullbacks along the way, provided Bitcoin remains between the $7,600 – $8,000 range at the very least,” he stated.
DiPasquale was not the only one to highlight the relationship between bitcoin and its digital sibling.
Cryptocurrency entrepreneur Erik Finman claimed that the biggest cause of litecoin’s recent gains was “Bitcoin’s rise with anticipation of a Bull Run happening this year.”
Going forward, the digital currency faces “significant resistance from $130-$150,” said Pearlstone.
As a result, he claimed that “The next leg up for Litecoin” will have “far more meaning from a technical standpoint to determine longer-range targets.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin and ether.