Litecoin has rallied lately, leading major cryptocurrencies higher.
Litecoin enjoyed some sharp gains today, pushing higher as the digital currency benefited from tailwinds such as the upcoming halving.
The altcoin (a cryptocurrency other than bitcoin) reached $102.75 earlier today, according to CoinMarketCap.
At this point, litecoin had surged 16% in 24 hours and was trading at its highest since mid-May, additional CoinMarketCap data shows.
Litecoin, which is very similar to digital sibling bitcoin, rose in value as several other cryptocurrencies experienced notable gains.
[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.]
When explaining litecoin’s recent gains, analysts pointed to several factors, including the upcoming halving, bullishness in bitcoin and strong market sentiment.
Litecoin’s Upcoming Halving
The cryptocurrency is scheduled to undergo a halving in August, at which point the mining reward will decrease from 25 LTC to 12.5 LTC.
When this event takes place, the rate at which new litecoin enters the market will reduce by 50%, potentially placing upward pressure on the digital currency’s price.
“A forward-looking market will anticipate price increase due to a restriction of supply and thus demand grows in the preceding months,” said Derek Sorensen, research mathematician for crypto firm Pyrofex.
“It may even create a small bubble resulting in a counterintuitive decrease in price after Litecoin halves.”
Joe DiPasquale, CEO of cryptocurrency fund of hedge funds BitBull Capital, also commented on the halving, describing it as “a positive driver for Litecoin price.”
Several analysts pointed to recent gains in bitcoin, noting that these bullish developments helped provide tailwinds for litecoin.
Dipasquale stated that the altcoin’s “surge is likely a result of renewed trust in the market as Bitcoin showed resilience, even in the face of SEC’s delay on the ETF decision.”
“Litecoin is directly impacted by the market’s trust in Bitcoin, since its price reflects Bitcoin’s strength and is amplified by consolidation in BTC or a move upwards,” said Dipasquale.
Erik Finman, a cryptocurrency entrepreneur who became a millionaire at a very young age, claimed that bitcoin has helped push litecoin higher lately, as some traders consider the altcoin a less expensive version of bitcoin.
Going forward, litecoin could notch additional gains, according to technical analysis provided by Jon Pearlstone, publisher of the newsletter CryptoPatterns.
“$100 is a key technical level for litecoin and price pulled back when price tested $100 a few weeks ago with moderate volume,” he stated.
“Todays retest above $100 has strong volume including buying on major exchanges in bitcoin (LTC/BTC),” said Pearlstone.
“This suggests a real bullish move with a bullish pattern that has a target at the next resistance level of [$125].
“On the other hand, watching the $100 price level here now becomes important. If price falls back under $100 after a strong move like this can be a red flag an intermediate term top has been reached.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin and ether.