Sell ​​news? Litecoin Traders Capitulate Ahead of Today’s Halving cryptoforbs

On-chain data shows that Litecoin traders are showing signs of capitulation, as the asset’s long-awaited halving event is now only a few hours away.

Does Litecoin Halving Mean Buying the Rumor and Selling the News Event?

“Halving” here refers to a periodic event where Litecoin block rewards (i.e. the rewards miners receive for mining blocks) are permanently halved.

This event takes place approximately every four years, and the next one, which will be the third, is scheduled to happen in about five hours if the data from the mining rig is accurate. NiceHash It is to pass.

The LTC halving is only a few hours away now | Source: NiceHash

This third halving event will reduce the cryptocurrency’s block rewards from 12.5 LTC to 6.25 LTC. Historically, these events have been important for the asset, because they mark the points at which the cryptocurrency’s production rate shrinks (which is nothing but block rewards, as miners releasing these coins are the only way to mint new LTC) and, consequently, the coin becomes more scarce.

Since these halving events are so important, the market naturally speculates around them, causing the coin to be exposed to volatility. In a new tweet, the on-chain analytics company Santiment It revealed how traders were behaving in anticipation of Litecoin’s halving today.

The data for the two indicators | Source: Santiment on X

In the chart above, Santiment has attached data for two metrics related to LTC: “social dominance” and “ratio of cross-chain transaction volume in profit to loss.”

The first tells us what proportion of social media discussions related to the top 100 assets in the cryptocurrency sector come from Litecoin alone.

From the chart it appears that this indicator has seen a significant increase today, which indicates that investors are participating in a large number of discussions related to the halving today.

The other indicator tracks the ratio between Take Profit and Take Loss volumes on the network. As shown in the chart, this metric has fallen below the 1 mark recently.

The ratio being less than 1 means that loss tolerance is the dominant force in the market at the moment. The size of the loss not only exceeds the size of the profit at the moment, but it actually exceeds it by more than 2:1.

This unusual loss may have been coming from investors who bought coins before the halving thinking it was a bullish event, but since Litecoin has recently fallen, holders have panicked and sold at losses in an attempt to avoid going even further underwater. The high social dominance of the asset may also be due to the explosion of FUD-related discussions.

Based on these signs, Litecoin is likely going through a classic “buy the rumor, sell the news” event.

Litecoin price

At the time of writing, Litecoin is trading at around $91, up 1% in the past week.

Looks like the asset has gone down during the past day | Source: LTCUSD on TradingView