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Bitcoin – The Bulls Hold on, as Litecoin Sees Another Solid Gain

Bob Mason

Bitcoin rose by 0.88% on Friday, reversing a 0.73% fall from Thursday, to end the day at $3,534.8.

After seeing red for a 6th consecutive month in January, it’s not looking too optimistic for February, with Bitcoin down 1.73% for the current week.

For the bears, the extended bearish trend was formed back at 5th May’s swing hi $9,999 and the trend looks set to continue for some time, with Bitcoin sitting well short of the 23.6% FIB Retracement Level of $4,816. More critically, the 38.2% FIB Retracement level of $5,809 is even more distant, with Bitcoin needing to break through the 38.2% FIB to begin forming a near-term bullish trend.

On the day, it was yet another quiet day on the crypto newswires, which used to drive much of the volatility through last year, leaving Bitcoin and the broader market directionless by historical standards.

Of the top 10 majors, Steller’s Lumen and Ripple’s XRP ended up in the red on the day, the pair bucking the trend from across the broader market, with losses of 0.87% and 1.04% respectively.

On the upside, it was Litecoin and Tron’s TRX that led the way, with gains of 3.58% and 3.55% respectively. While Litecoin and Tron’s TRX enjoyed some sizeable gains on the day, there was little action across the rest of the top 10, which saw modest gains. EOS ended the day with a 1% gain, while Ethereum rose by just 0.09%.

With the lack of any catalysts to provide direction for Bitcoin and the broader market, there’s been a pickup in chatter on halving dates. With halving reducing the number of coins that miners are rewarded with, which in theory leads to fewer coins being sold each day, historical data has provided some evidence of crypto rallies in the run-up to each halving event.

While Bitcoin’s halving is due in May of next year, Litecoin’s is due much sooner and is projected to take place in early August of this year.

Interestingly, Litecoin’s adoption had been attributed to its recent gains, however, history suggests that the upcoming halving could be the primary contributor. If we consider adoption in isolation, Ripple’s XRP should be performing in line with, if not outperforming Litecoin, when considering Ripple Lab’s successes and the latest announcement by SWIFT.

So, if history does repeat itself, however rare in the global financial markets, with demand a key consideration, Litecoin should be on the precipice of a major rally.

The last halving took place in August 2015. In the run-up to the August 2015 halving, Litecoin saw 3 consecutive monthly gains, from May to July. Litecoin rallied by a whopping 226% before hitting reverse in August. For the skeptics, the 3 consecutive monthly gains came off the back of 4 months in the red out of the preceding 5 and August’s reversal was the largest of that year, which does support the theory of halving and price action.

Year-to-date, Litecoin is up 8.7%, outgunning the rest of the majors, with the exception of Tron’s TRX and, while Bitcoin has some way to go before its next halving, Litecoin’s is around the corner. The very fact that investors are aware of the effect of halving on cryptocurrency pricing suggests that a rally is in the making, though that assumption does come with one caveat. If the cryptomarket goes into meltdown, it’s going to need more than a halving to garner investor interest.

Outside of Litecoin’s halving later this year, the only other key drivers, at the time of writing, will be the SEC’s Bitcoin ETF decision and the heavily anticipated rollout of rules and regulations by the G20 in the summer.

Both the SEC decision and the G20’s rules and regs could pour ice on the effects of Litecoin’s halving but, when considering the regulatory oversight already evident in key jurisdictions, a unified set of rules and regulations could ultimately be embraced by the broader market.

While volatility may have fallen off a cliff, it’s unlikely to have gone for good…

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At the time of writing, Bitcoin was down 0.27% to $3,525.4, with Bitcoin joining EOS and Tron’s TRX in the red in the early hours.

The bulls will be looking for a weekend rally, which could be on the cards should Bitcoin hold above sub-$3,520 levels through the morning. It’s not the first time that Bitcoin has kicked off the day in the red.