Litecoin’s (LTC) hash rate or computing power crashed to yearly lows over the weekend.
The non-price metric, widely considered a gauge of network strength, fell to 149.648 tera hashes per second (TH/s) on Saturday – the lowest level since Dec. 17, 2018, according to data source bitinfocharts.com.
The hash rate has dropped more than 70 percent in 4.5 months, having topped out at 523.8173 TH/s on July 14. Most of the slide came after Aug. 5, when the mining reward per block dropped from 25 LTC to 12.5 LTC.
The supply-cutting event was expected to boost both prices and the hash rate into the stratosphere. However, the opposite has happened.
Litecoin is currently changing hands at $46, representing a 56 percent loss from the high of $104 registered on Aug. 4.
A rise in prices boosts mining profitability and attracts more miners, pushing the hash rate higher. But a sustained price drop eats into mining profitability, prompting miners to curtail operations. That leads to a big drop in the computing power.
The reward halving failed to put a bid under the cryptocurrency, possibly because the event was anticipated and thus already incorporated into traders' assessment of the appropriate price.
For instance, litecoin doubled from $30 to $60 in the first quarter despite the flat action in bitcoin, the world’s largest cryptocurrency by market value, and extended gains further to highs above $150 by June.
Also, many had assumed that investors would snap up litecoins post-halving, as it leads to a drop in supply (miners add fewer coins to the ecosystem).
Instead, investors stayed away from the sixth-largest cryptocurrency, possibly tracking the sell-off in bitcoin. The top cryptocurrency has declined by 50 percent in the last five months. |
 
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Bull Bias Intact Despite Weekend's Pullback
BTC: Price: $7,300 | Market cap: $131.75 Billion | 24-Hr Volume: $17.70 Billion
Trend: Bullish Bitcoin's pullback from Friday's high of $7,870 to $7,300 lacks volume support and could be reversed; the daily chart MACD histogram, an indicator used to identify trend changes and gauge trend strength, is sending a bullish signal.
Further, with prices holding well above $6,847, the bullish hammer reversal pattern confirmed on the three-day chart last week is still valid.
All-in-all, a re-test of the resistance at $7,800 could be in the offing in the short-term. The bullish case would weaken if prices drop below $6,847.
Long-term trend: Neutral
Bitcoin ended November with a 17 percent drop, the biggest monthly loss in a year. The cryptocurrency has found acceptance below the 50-week moving average – a cause of concern for the bulls. Historically, bitcoin has suffered deeper losses after falling below the key average.
Even so, the outlook remains neutral, as the miners’ reward halving, usually a price-bullish event, is due in May 2020. With BTC looking oversold on the daily chart, a notable recovery ahead of the supply-cutting event can’t be ruled out.
The outlook as per the weekly chart would turn bullish only if and when prices break higher from the five-month long bearish channel.
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VeChain Soars 13 percent VET: Price: $0.007566 | MCAP: $419 million | 24-Hr Volume: $199 million
Short-term trend: Bullish VeChain is reporting double-digit gains in both U.S. dollar and bitcoin terms.
Notably, the BTC-denominated exchange rate jumped to 108 sats earlier today to print the highest level since May 18.
Experts are associating the price rise with the news that Microsoft, game developer Eidos and gamebook firm Fabled Lands are planning to release a blockchain card game based on a 1980s best-selling gamebook on VeChainThor ledger.
The rally looks set to continue with the daily chart reporting a pennant breakout, a bullish continuation pattern. Further, the MACD histogram has crossed above zero on the daily chart, confirming the bullish trend.
A break above resistance at 110 sats will likely fuel a rally to 123 sats (May 1 high). That said, with the intraday charts reporting overbought conditions, a pullback to 98 could be seen before further gains. Long-term trend: Bullish
VeChain has doubled in value in the last six weeks, confirming a rounding bottom pattern on the three-day chart. As a result, the path of least resistance is to the higher side. The bullish case would be invalidated if prices drop below 67, invalidating the higher lows setup.
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| | | Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. |
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Hash Rate Crash