By: Zeng Han-Jun, Head of Research, Market Capital Research

Litecoin (LTC) has captured the attention of investors with its consistent uptrend in recent months. However, data indicates that interest in this digital asset may be waning as its highly anticipated halving event approaches. This decline in trading volume could potentially hinder LTC’s ability to recover and regain its bullish momentum.

Once celebrated for surging above the $100 mark, Litecoin’s trading volume has experienced a significant decline in correlation with its recent drawdown. On Wednesday, there was a 28% drop in LTC’s trading volume compared to the previous day. A decrease in daily trading volume often suggests that investors may be shifting their focus away from the asset, particularly after securing profits during the mini-bull rally.

One potential catalyst for a bullish LTC recovery is the upcoming halving event. This highly anticipated event, occurring approximately every four years, involves cutting the block rewards for miners in half. As a result, the rate at which new Litecoin coins are introduced to the market decreases, effectively slowing down the cryptocurrency’s inflation rate. Historically, halving events have generated increased demand for coins, as investors seek to accumulate tokens amidst the reduced rate of issuance.

However, it is important to consider the possibility that the halving event may already be priced into Litecoin. With just a week left until the event, the current bearish trend in LTC’s price raises the question of whether a significant rally will actually materialize. If market participants believe the halving event has already been factored into the price, we may not witness the anticipated surge in value. Consequently, Litecoin could potentially continue trading below the $100 mark even after the halving occurs.

As of now, Litecoin is experiencing a price of $89.36, indicating a marginal 0.03% decline in the last 24 hours and a 3.97% decrease over the past week. While the halving event offers potential upside, there are concerns that the event’s positive impact may already be reflected in the current market price. Consequently, it remains to be seen whether LTC can overcome the decline in trading volume and regain its bullish momentum in the near future. Investors will undoubtedly keenly observe how Litecoin’s recovery unfolds following the highly anticipated halving event.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The NFT and cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.