A week after the much-anticipated Litecoin halving event on August 2, on-chain data reveal that the network hash rate, a key measure of the computing power channeled to the network, is stable but erratic.
As of August 9, trackers indicate that the hash rate of the Litecoin network hovers around 760 TH/s, a notable drop from the all-time peak of 816 TH/s recorded in late July 2023.
Litecoin Prices Stable But Lower, Rally Coming?
Litecoin prices, on the other hand, are firm but lower in the previous trading week. CoinMarketCap facts on Aug. 9 shows LTC changing hands at $83, down 5% over the past week. What is clear is that prices move tightly within a consolidation range.
Despite this dip, LTC is relatively resilient, up 17% from June 2023 lows. However, from a top-down preview, the coin is down 26% from 2023 highs. In the medium term, LTC remains bullish, as bears have failed to reverse gains from mid-June to mid-July 2023. However, whether the bulls will maintain control after the halving is also unclear.
If past performance leads, there is a glimmer of hope for bulls. Litecoin’s previous halving in August 2019 was several months before LTC ripped to $400 in 2021. Yet before this spike, LTC prices had nearly halved from $66 to $35 in December 2019.
Unlike previous halvings, the crypto space has matured and regulatory clarity has improved, particularly with regard to Bitcoin, the basic protocol from which Litecoin emerged. For example, while most US regulators consider Bitcoin a commodity, the Securities and Exchange Commission (SEC) is cautious about other altcoins.
Track on-chain metrics to gauge interest
Given the aforementioned challenges and regulatory uncertainty, the interrelationship between hash rate and spot prices is actively monitored. Litecoin relies on decentralized miners for security and transaction confirmation.
The security of the network is evaluated through the hash rate metric, which is at risk of crashing as miners have to allocate more resources after the network halves the rewards to 6.25 LTC. A potential drop in price could lead to a corresponding reduction in the hash rate, forcing the network to adjust the difficulty.
How this evolves remains to be seen, and the network remains stable at spot rates. Aside from the hash rate which is near the highest ever, the network’s activity appears to be unaffected. IntoTheBlock reports this factsaverage network growth is stable despite generally negative sentiment on LTC.
Feature image from Canva, chart from TradingView