Litecoin’s Trading Volume Drops: Sign of a Price Drop?

litecoin

The rise of Litecoin has made the LTC token a popular choice among investors in recent months, mainly due to its consistent uptrend in June. However, recent data shows that interest in this cryptocurrency is starting to wane, despite the impending halving which is attracting a lot of attention. This change in sentiment could have a significant impact on Litecoin’s ability to recover and continue to grow.

Litecoin’s trading volume on the move

Litecoin trading volume was on the rise, especially when the price broke above $100 a few weeks ago. However, with the downward movement that the altcoin has experienced during that same period, the trading volume has also dropped significantly.

This Wednesday turned out facts from Coinmarketcap that Litecoin trading volume was down 28% from the previous day’s volumes. As with any digital asset, a drop in daily trading volume could indicate that investors may be losing interest in the asset, especially after securing gains from the mini-bull rally.

This decrease coincides with the price action of the altcoin, which has mainly entered a bearish trend.

LTC rate July 27
BTC/USD 4 hours per candle – Source: TradingView

In anticipation of the Litecoin halving

A favorable development for Litecoin’s LTC token is imminent halving. This event, which takes place approximately every four years, will halve rewards for miners in blocks. This will also slow down the rate at which new coins enter circulation, effectively curbing the inflation of the cryptocurrency.

LTC halving
LTC halves in one week | Source: Nice Hash

Events such as halvings are typically met with enthusiasm by investors eager to amass more tokens as issuance diminishes. However, sentiment can quickly turn if the price of the asset rises significantly and investors decide to cash in on their profits, which could usher in a bearish market trend.

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With the Litecoin halving just a week away and the LTC price still in the red, it is likely that the upcoming event has already been factored into the current price. This could lead to the lack of the massive rally investors are hoping for after the halving. It is entirely possible that LTC will maintain its trading level below $100 even after the halving.

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