A few days ago I tackled the question on everybody's mind. Where is the bottom? I took a look at Bitcoin and used mining data to say (with absolute uncertainty) that the lowest Bitcoin could go at around $3500. What I used to calculate that was the amount of 'workers' mining the coin and what the zero profit price of the coin would be. This is not by any means accurate as there are many factors at play. This is one good way of looking it. I know that I would be hard pressed to turn off my machines and also hard pressed to sell my coins for a loss. That is why I am publishing this data. It is one good way of looking at the bottom.
Many people use technical analysis without thinking about the fact that Bitmain has produced millions more workers since the last major bottom was hit. This is why it is not a safe assessment. It is not purely speculative like the stock market. The new coins that are coming into the market are coming to the market THROUGH the miners. They / we, will not want to sell coins for a loss.
Of course, we can switch our workers to a different currency... but, as we all can see, the whole market is following bitcoin and as such, the trend is down at the moment.
So... today I am going to do the same math and see where the bottom is for LTC.
Photo taken from coinwarz.com
So, as you can see... there are 250.95 TH supporting LTC at the moment. Let's make a few assumptions for easy math. Every worker on that network is hashing at 504 MH (which is the speed of the L3+, the likely majority machine on the network). That means that there are 497,916 machines supporting the Litecoin network. Let's also assume that each worker takes $1.54 to power / day.
Litecoin releases 25 coins every block (2.5 minute blocks). As such, there are 14,400 new litecoin 'minted' each day.
To power 497,916 machines at $1.54, the LTC network costs $766,790.64 / day
$522,811.80 / 14,400 coins = $53.24
Litecoin is currently sitting at around $59, so it is getting fairly close to it's terminal low. Terminal low being the point where miners are forced to mine at a loss or turn off their machines.
Please know that I made a bunch of assumptions and just did this math to show you where the market is / could be with regards to a low. This is not investment advice, just some homework for the research that you may be doing. I just figured that I would make public the research that I am doing.
So... we are really nearing a bottom on LTC. $53.24 is where there should be some major support as the miners will not want to mine at a loss.
Thanks for reading and I hope you enjoyed.