The anticipation around the ‘historic’ update was building litecoin for a rally. But after the release of the upgrade, investor reaction seems to have backfired.
It reminds us of the times when smart contracts in Cardano with the Alonzo hard fork they were to be introduced. Despite the buzz of the development, investor interest faded.
Is Litecoin about to drop?
LTC is one of the oldest altcoins in the crypto space. At press time, it was trading at $62.67. Litecoin witnessed another downtrend with the market crash as the coin dropped over 13.79% over the past week.
Most of the decline occurred in the previous 72 hours alone, sending LTC down from $70.16.
The events unfolded precisely one day after Litecoin triggered the MimbleWimble upgrade. This was a landmark update for the Litecoin chain as it introduced the secrecy feature that allows users to hide their transaction data. It also catered for lower transaction fees and scalability issues.
But, what it failed to bring was the hype that was needed to change the status of the altcoin.
As it stands, Litecoin is hardly a competitive chain in the rapidly evolving crypto space, where blockchains are doing their best to evolve and support web3 functionalities.
The token still runs on proof of work and does not offer web3 capabilities. Also, it is still only a means of transaction for supported merchants.
In particular, the cryptocurrency has been steadily losing its value in the market since its peak in May 2021. At the time of writing, the value of LTC in the cryptocurrency market as an asset for investment has decreased to the same level as had in April 2020.
Some of Litecoin’s long-term faithful holders also managed to predict this drop or unintentionally moved their holdings to avoid any outcome of the MWEB upgrade.
This is verified by the consumption of 421.07 million days which, although it is a relatively lower figure, is still the highest recorded since April 7.
This was also the trigger that broke the almost two-month accumulation trend among LTC investors.
Whether Litecoin can recover from the bearish state cannot be declared at this time as LTC is largely supporting bearish signals from the broader market in its price action.