The cryptocurrency market is experiencing a resurgence following a significant sell-off, with Litecoin (LTC) leading the recovery efforts. Over the past 24 hours, the price of Litecoin surged by 16%, indicating a renewed sense of confidence among investors. At the current moment, the digital currency is trading at around $123 despite encountering a 9% decline in price over the past week. A key factor contributing to the positive sentiment surrounding Litecoin is the speculation of a potential exchange-traded fund (ETF) dedicated to the cryptocurrency.
While overall trading volumes remain relatively low, on-chain activity points to growing interest from both institutional and retail investors in Litecoin. This renewed interest comes amid a turbulent period for the wider cryptocurrency market, which recently saw a liquidation event resulting in $1.4 billion worth of losses.
Currently, the cryptocurrency sector is facing a notable downturn, with the total market capitalization dipping below the $3 trillion benchmark. Bitcoin, a major player in the market, is priced at approximately $87,000, reflecting a slight decline of 1% over the course of the day and 8% over the week. On the other hand, Ethereum, the second-largest cryptocurrency, is trading at around $2,429, influenced by a significant hack affecting the Bybit exchange, which incurred losses totaling $1.5 billion.
Market analysts are speculating that Litecoin’s resilience may signal a potential reversal of trends for various altcoins. One significant catalyst for Litecoin’s recent growth is the increasing probability of the approval of an ETF focused on the cryptocurrency. According to analysts from Bloomberg, there is a 90% likelihood that the U.S. Securities and Exchange Commission (SEC) will approve such a fund.
Canary Capital has reportedly filed for a Litecoin ETF, with the SEC recognizing the application and entering the review phase. Should the ETF receive approval, it would grant institutional investors access to Litecoin without the need to hold the asset directly, potentially leading to increased demand.
Alongside these developments, Litecoin’s rally corresponds with a notable uptick in its on-chain activity. Recent data shows that the cryptocurrency has processed a daily transaction volume nearing $9.6 billion over the past week, showcasing an impressive 243% increase compared to five months prior.
Despite the positive trends, Litecoin still faces resistance at the $140 mark, with analysts suggesting that a rally to $170 could unfold if bullish momentum persists. From February 2 to February 19, Litecoin has climbed over 40%, significantly outpacing gains across the broader market.
Nonetheless, traders are approaching the situation with caution, aware that market sentiment may shift if the SEC were to postpone or deny the ETF proposal. For now, Litecoin stands at the forefront of the altcoin market’s recovery, with keen attention focused on forthcoming developments related to the ETF initiative.