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Litecoin, its growing mining difficulty, and why it could go against LTC’s price action

Litecoin, its growing mining difficulty, and why it could go against LTC’s price action
  • Litecoin mining problem continues to extend, probably risking miner profitability
  • Litecoin’s upside was experiencing sluggish momentum at press time

Litecoin [LTC] demonstrated optimistic progress in a number of sides over the previous couple of weeks. These areas included its hash fee and worth. The community’s newest announcement confirmed that mining problem additionally went up and right here’s why which may spoil the celebration.

Learn Litecoin’s [LTC] worth prediction 2023-2024

At first look, a rise in problem doesn’t essentially imply a foul factor. In reality, it’s typically thought-about a great way to measure of a community’s decentralization stage. Nevertheless, Litecoin’s counterpart Bitcoin [BTC] lowered its mining problem resulting from low profitability which led to many miners halting their operations.

Consequently, Bitcoin’s hash fee was negatively affected. However is the current enhance in mining problem an indication that Litecoin is likely to be headed in the identical course?

As famous earlier, Litecoin’s hash fee witnessed substantial progress in the previous couple of months. There are advantages equivalent to a better safety and decentralization rating. Nevertheless, the upper mining problem will finally make Litecoin mining much less worthwhile particularly if extra miners bounce on board.

Litecoin hash rate

Supply: Coinwarz

LTC’s newest upside represented sturdy demand which had been fairly accommodative for miners. Extra buying and selling exercise means there are sizable transactions to facilitate miner rewards.

This additionally signifies that a drop in LTC buying and selling exercise would possibly make mining much less worthwhile for Litecoin miners. The upper mining problem would additional exasperate the scenario.

Litecoin mining difficulty

Supply: Coinwarz

How LTC worth motion can probably set the dominos in movement

LTC’s upside was beginning to present indicators of slowing momentum. A possible end result right here could possibly be that traders might promote, resulting in a large pullback. However, merchants might decide to carry since LTC was nonetheless buying and selling at a hefty low cost from its ATH. If the latter occurs then LTC would possibly undergo a section of low volatility. Such an end result would imply decrease profitability for miners.

LTC’s newest worth motion already indicated that promote stress was gaining traction. Moreover, the Relative Energy Index (RSI) already indicated that the bulls have been rising weaker. Moreover, the price-RSI divergence might give method to extra draw back.

Litecoin price action

Supply: TradingView

The Cash Circulate Indicator (MFI) ought to point out sturdy draw back but it surely presently confirmed slight outflows. This recommended that promote stress was nonetheless low, additional supporting the expectation of sideways worth motion.

An analysis of Litecoin’s provide distribution additionally confirmed that whales weren’t presently contributing a lot to the present promote stress.

Litecoin supply distribution

Supply: Santiment

Whereas the above observations indicated a scarcity of sturdy promote stress, a sudden change of tempo was nonetheless possible.

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