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Litecoin’s price hit its highest level in over a year on Monday.
The world’s fourth largest cryptocurrency as per market capitalization rose to $128.07 at 12:00 UTC on Coinbase – the highest level since May 23, 2018 – and was last seen trading at $126, representing a 10 percent gain on a 24-hour basis.
Notably, the recent price action suggests LTC is leading the broader market higher. The cryptocurrency is currently up more than 30 percent from the low of $97 seen on June 4.
Meanwhile, bitcoin, the world’s leading cryptocurrency by market value has gained just 7 percent during the same time frame.
LTC’s outperformance could be associated with the mining reward halving due in less than 60 days. On Aug. 8, the reward for mining on litecoin’s blockchain will be halved from 25 coins to 12.5 coins per block.
The cryptocurrency rallied more than 500 percent in three months before the previous reward halving, which took place on Aug. 25, 2015.
The price increased from around $1.5 in May 2015 to hit a high of $7.00 in July 2015 before falling back to $3.00 post-halving, according to historical data.
If history is a guide, LTC continues to rise over the next four weeks before witnessing a bout of profit taking ahead of the Aug. 6 event.
It is worth noting that litecoin’s non-price metrics are also witnessing solid growth. For instance, the hash rate has hit a new lifetime high of over 400 trillion hashes per second today, according to bitinfocharts.com.
Daily chart
LTC continues to chart bullish higher lows and higher highs with the major moving averages aligned in favor of the bulls – the 50-day MA is located above the 100-day MA, which is holding above the 200-day MA. All three averages are trending north, indicating a bullish setup.
Further, the relative strength index (RSI) is breaking higher from the consolidation, signaling a continuation of the rally from the price low of $66 seen at the end of April.
More importantly, the indicator is well short of the high of 86.00 seen in the first week of May, meaning there is plenty of room for price rally in the weeks leading up to the reward halving.
All-in-all, LTC looks set to test the psychological resistance of $150 in the short-term. The rally to $150, however, may not happen if BTC tanks, dragging the broader market lower.
However, even in that case, LTC’s BTC-denominated exchange rate may do well. LTC/BTC is currently trading at 15,910 sats, the highest level since April 15, according to Binance data.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Litecoin image via Shutterstock; charts by Trading View
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