In a pivotal moment for the crypto landscape, Litecoin (LTC) is gearing up for its LTC20 halving event, slated for August 10, 2023. The crypto community is buzzing with speculation: could this be the turning point that shapes the future trajectory of LTC? Blockchain analytics firm, Santiment, offers an illuminating perspective on the potential impacts of this event.

According to an analysis by Santiment, this halving event – set to occur on block 2,140,000, where mining rewards will drop from 12.5 LTC to 6.25 LTC – could induce significant changes in Litecoin’s price, supply, and demand. This echoes a pattern historically seen in Bitcoin’s halvings, suggesting that LTC might follow a similar trajectory.

Santiment explains that the halving – a feature shared with Bitcoin – halves the amount of Litecoin created each time a block is mined. This tends to stimulate two significant effects: a surge in mining activity before the halving and an increased valuation of each existing LTC due to the universally acknowledged slower production of coins post-halving.

These factors, according to Santiment, typically foster price increases, the timing of which often aligns with the crowd’s enthusiasm and awareness of the event. Recent trends in on-chain transaction volume, as analyzed by Santiment, seem to support this expectation. From May 8, there’s been a steady rise in volume, a strong indication of increased investment activity in LTC, likely in anticipation of the halving.

Interestingly, Santiment also notes a sharp uptick in the number of unique addresses interacting on the Litecoin network, reaching a one-year high just as its price was bottoming out – a possible sign that addresses were accruing LTC ahead of the anticipated halving.

Though Santiment observes that average traders seem to be thriving, the firm suggests a cautious approach, anticipating a possible cooling period for profits over the next week or two.

Finally, Santiment advises keen attention to the news cycle, particularly any significant influencers discussing LTC aggressively. While there may be optimal price points to invest in, Santiment warns against being too precise, which could result in missed opportunities. They conclude by recommending a strategy of dollar-cost averaging into an asset believed to rise, be it LTC in this halving event or Bitcoin’s next year.

As CryptoGlobe reported yesterday, Litecoin futures derivative contracts have seen an open interest exceeding $420 million, marking an impressive 22% growth since the beginning of the year.