As a seasoned researcher with a keen interest in the cryptocurrency market and its intricacies, I find myself intrigued by the recent developments in Litecoin (LTC). The 1.5% surge on November 5, while welcome, is overshadowed by the correction that followed, and more importantly, the drop in the hash rate to its lowest level in almost a month.
LTC price rose by 1.5% on November 5, reaching an intraday high of $67.20. Litecoin remains in a correction after falling by 12% from its highest level in October. Its downtrend may continue as the hash rate drops to its lowest level in almost a month.
LTC Price Pressured As Hash Rate Slips
Over the past several days, Litecoin, which is currently ranked as the 24th largest cryptocurrency, has experienced a significant decrease in its hash rate. As per CoinWarz data, this rate has retreated to 1.1048 Petahash per second (PH/s), reaching its lowest level since October 7. This figure is notably lower than the high of 1.3667 PH/s it reached just last month.
LTC’s hash rate has coincided with the drop in its mining difficulty, which dropped to 41.93, its lowest level since October 11, and much lower than October’s high of near 45 million.
A hash rate is an important number in proof-of-work cryptocurrencies that looks at the computational power used in mining. A higher hash rate is a sign that a cryptocurrency is more secure.
As a crypto investor, it seems apparent to me that one possible explanation for the declining hash rate could be the less-than-impressive performance of LTC over the past few months. Compared to where it stood at the yearly peak, Litecoin is currently down by approximately 40.6%, while Bitcoin, on the other hand, has only dipped 6.50% from its all-time high. This discrepancy might be affecting mining enthusiasm and thus leading to a decrease in hash rate.
Litecoin Price Analysis As It Sits On A Key Support
The price of LTC reached a bottom of $50.44 in August due to the weakening of the Japanese yen carry trade, causing a drop in both stocks and cryptocurrencies. It subsequently rose to $76.10, creating a small double-top formation with a neckline at $66.85. A double-top is a commonly used pattern that often signals a reversal.
The price of Litecoin’s cryptocurrency token has fallen beneath not only its 50-day, but also its 200-day Exponential Moving Averages (EMA). This indicates that currently, the sellers have the upper hand.
Thankfully, it’s been holding steady along an upward trendline set by the lowest high points since August 27. This line has been rebounded above on at least five occasions during this period. Additionally, the LTC price currently lies above the 23.6% Fibonacci Retracement level, which is approximately $65.05.
Consequently, there’s a potential for Litecoin’s price to experience a significant downturn if it breaks its upward trendline. In such a scenario, it might fall as low as the August minimum of $50.44, representing a 24.3% decrease from its current value.
Should the price of Litecoin surpass the double-top mark at $74.30, the prediction made here will no longer hold true. If this occurs, it could potentially reach a 50% retracement level, which is approximately 22.1% higher than its current value.
Litecoin chart by TradingView
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2024-11-05 16:37