- The Litecoin halving caused a big price jump before and at the time of the event, but heavy declines after it.
- I’m wondering if the near Steem event (HF21) will cause the opposite…?
A week ago and more you could read opinions that the Litecoin Halving will curb the price up. This is the 50 percent reduction of the emission of new Litecoins per block. (The coin supply growth per block will be half than before.) In the past, similar halving events, by Bitcoin and by Litecoin, seem to have triggered often a greater price surge.
Halving after halving
And it is difficult to forget that in the summer of 2016, less than one year before the “big cryptocurrency hype”, also a Bitcoin halving happened. (The next Bitcoin halving is estimated for mid-2020.)
But back to Litecoin, and short term movements. Litecoin is falling, what happened? After the halving on the 5th of August, approximately 9.30 UTC, the price jumped huge, over 106 USD, in some hours. But just in a couple of hours more, it lost a large part of it. Today, it is much lower than before the halving, by 86 USD.
Million times before
“Buy On The Rumor, Sell On The News” – I think that is what happened. This can be one of the oldest stock market quotes, or, observations. But seemingly it is not well known by all investors. That means:
The saying "buy the rumor, sell the news" comes from the phenomenon of stocks trading up into "big" announcements, and then (often) selling off shortly thereafter. (Source)
What happened with Litecoin happened millions of times before. People knew very early this event will come, years in advance. Those who believe in Litecoin and think in the long term had all the time needed to buy it. Maybe other people seeking only short time returns also bought a lot before the event. After the halving, there were no more buyers left. Instead of the longer-term price jump, a sell-off began soon.
Buy on bad news?
I think we can observe often the opposite phenomenon, too. Bad news can also initiate a price surge of an asset. At least if this news was already broadly known, awaited, estimated. Many times all investors sold before who were scary, so there were no more sellers left at the time of the event. So, the price jumps on bad news. (Besides, uncertainties are bad for prices. If a bad event happens, future risks can be considered lower after it. Better a bad, but certain news than a bad, but insecure one.)
I have an idea. What if the same will happen with Steem? Maybe we see the risks and uncertainties of the Hard Fork 21 priced in on the market now, by 0.2 USD/STEEM? Many are selling because they don’t want to risk the fork? I see so many discussions and concerns, negative feelings about it.
No more STEEM halving
What if the fork will be no worse or maybe some better than the previous expectations? The event is here and nothing special happens? The fork results to be a big success? What will the price do? Does a rally begin?
I have this feeling but I’m not sure. Because the 13 weeks (3 months) long cool-down of the power down processes can end after August in case of many leaving users. Others are, perhaps, waiting for the fork and can leave after it if they don’t like it. In reality, nobody knows what happens. I only wish not to experience more STEEM halving…
The series “Chart Of The Day”
I started a series with the title “Chart Of The Day” because I see every day interesting events or phenomena on the markets or in the news. Other parts here:
The last ones:
- Is Bitcoin Moving Like Gold? Or Like Something Else?
- How Many Tokens Do We Have? Crazy
- Which Token Fell 80 Percent In A Single Day?
- Wow, Wow, How Overperforming!
- Is Voice A Success?
- We Need 14,403 Steem Blockchains More!
- How Unstable Stablecoins Can Be?
- Where Is The Chinese Miracle?
- Dominance On 2017-Level
- Are Facebook Shareholders Ignoring Libra?
- Forbid USD, It Is Used For Drug Buying!
- What Was The Biggest Fall Today?
- Is The Steem Inflation The Real Cause…?
- High Traffic Gives A Glimmer Of Hope
- Are Precious Metals Breaking Loose?
- See This Authentic Dinosaur Struggling
- Steem Has Sooo Many Dapp Users
- Do You Still Believe In Your Tokens?
- How Did Altcoin Prices Perform In The Very Long Term?
(Photo: Own work)