The Litecoin cryptocurrency referred to by fans of digital assets as 'digital silver' has been doing much better than the market average of major cryptocurrencies in recent days. Reasons for Litecoin's bullish reaction may include the upcoming 'halving' i.e. a 50% drop in supply and reward for block mining:
- The so-called 'halving' is programmed into Litecoin's code, similar to Bitcoin. Historically, halving has been a positive driver for a bullish price reaction, with it the available supply of the cryptocurrency decreases. Litecoin's mining difficulty recently climbed to a record high of 18 million 'hashes,' according to the Litecoin Foundation and data from Coinmarketcap;
- The mining difficulty index measures the average number of 'hashes' required to validate the next block. Litecoin miners compete with each other's computing power similarly to Bitcoin; winners add a new block to the blockchain for which they receive a reward, paid out in Litecoin;
- The increase in the difficulty of mining confirms that miners are competing more and more 'fiercely' for LTC - this could mean an increase in computing power due to new, more efficient equipment, an increase in the number of diggers, an influx of new 'miners' mining the cryptocurrency, or all of these reasons simultaneously;
- Litecoin was launched in 2011, miners at the time received 50 Litecoin for mining a block. This reward halves with each successive halving (by 840,000 blocks every four years or so). The third halving will take place as early as next year (nearly a year earlier than Bitcoon) and will reduce the current 12.5 LTC reward to 6.25 LTC;
- U.S. payments company MoneyGram announced that its customers will be able to both buy, sell and store Litecoin on the MoneyGram mobile app.
Litecoin chart, D1 interval. The cryptocurrency is moving in a downtrend from which it has recently broken out more dynamically than Bitcoin itself, adding nearly 30% over the past few days. It is worth noting the periods marked with an orange box. These periods coincide with the cryptocurrency market's slump and are counted from the 'death cross' to the 'golden cross', i.e. the well-known formation of the intersection of the 50- and 200-day moving averages. When we look at the two averages currently (black and red), we can see that they are heading for an intersection, which in the past has heralded a longer recovery. A bullish intersection could only be stopped by a sudden drop in Litecoin's price. Source: xStation5