The renowned trader and technical analysis expert, Rekt Capital (@rektcapital), provided a comprehensive analysis of Litecoin’s (LTC) price tendencies around its halving events back in January 2023 and they were right on most of the points so far!
Rekt Capital had noted that LTC historically rallied strongly prior to its halving. Before the first halving, LTC bottomed 122 days before the event and rallied by 820%. Before the second halving, it bottomed 243 days before and rallied by 550%.
However, the post-halving rallies were even more impressive. After the first halving, LTC rallied over 14000%, and after the second, it rallied by over 1500%. This suggested that LTC tended to rally more post-halving compared to pre-halving.
Despite these strong rallies, LTC also tended to sharply and deeply retrace immediately after the halving. It retraced by 73% in the 578 days post the first halving and by 83% in the 458 days post the second halving.
Rekt Capital also noted that LTC tended to top out just before the halving. It topped 31 days before the first halving and 61 days before the second. The analyst speculated that LTC could top 92 days before the third halving in May 2023. However, LTC actually topped in July 2023, hitting the $113.3 mark, contradicting Rekt Capital’s prediction.
The duration of these pre-halving rallies also seemed to be lengthening. The first pre-halving rally lasted approximately 90 days, while the second lasted twice that amount at around 180 days. If this pattern continued, the pre-halving rally leading up to the August 2023 halving could have lasted around 365 days.
In terms of potential returns, Rekt Capital suggested that LTC could rally up to 285% before its August 2023 halving (which didn’t happen either). However, once LTC formed its pre-halving top, it tended to strongly retrace (minimum 75%) and then form a new accumulation range, and based on the current technical indicators and trends, Rekt Capital is on point here.
Historically, these post-halving LTC ranges developed at a higher low compared to where LTC bottomed prior to the halving. If LTC were to perform its pre-halving top at major resistance and form a higher low relative to the pre-halving low, then the LTC post-halving retracement could be around 60%.
However, history suggested this retrace should be deeper than that (minimum 73%). If a 73% to 78% post-halving retrace were to occur, then LTC would still hold a higher low. Following a halving event, Litecoin (LTC) has historically experienced a significant retracement, which subsequently leads to the formation of a new post-halving accumulation range.
These accumulation ranges have typically been approximately 72% to 77% wide. This suggests that after a deep post-halving retracement, LTC tends to enter a period of prolonged consolidation within a range that is roughly 70% wide. Therefore, for investors and traders, it is crucial to monitor for such a deep retracement followed by an extended consolidation within this approximate range, as it could potentially offer strategic entry and exit points based on historical patterns.
Rekt Capital added that LTC had historically consolidated in a post-halving range for 458-578 days before breaking out. If the consolidation time was constantly declining by around 120 days, then it could take a year for LTC to break out, potentially in July 2024.
Litecoin (LTC) has shown a tendency to rally more significantly after its halving events compared to before. Following the first halving, LTC experienced an impressive rally of 15330% over a span of 853 days. The second post-halving period also saw a substantial rally, with LTC surging 1562% in 639 days. Notably, each of these post-halving rallies resulted in LTC reaching new all-time highs. Drawing from these historical patterns, it was suggested by Rekt Capital back in January 2023 that LTC could potentially reach new all-time highs again, approximately 400 days or more after the 2023 halving.
Overall, the analysis suggested that LTC was forming a macro wedge, with price compression occurring that precedes volatility. Historically, LTC rallied more post-halving versus pre-halving, with each post-halving rally making new all-time highs. History suggested LTC may make new all-time highs 400+ days post the 2023 halving.
However, as of August 2023, following the LTC halving, the price of LTC has been on a downtrend and is currently down to $87.6, a decrease of 6% in the last 24 hours.
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