The cryptocurrency market has experienced a period of relative calm recently, with a majority of major digital currencies either suffering minor losses or stabilizing. However, Litecoin (LTC) has notably distinguished itself by achieving a robust increase, soaring over 10%, and becoming the top performer among the 100 largest cryptocurrencies.
As per current market observations, Litecoin’s trading price reached $118, reflecting increases of 11% over the past day and 22% over the week. The market capitalization of LTC has also reached nearly $9 billion. While these indicators hint at a potentially bullish trend, there remains uncertainty regarding whether this upswing represents the start of a larger bullish movement or if a subsequent price correction is on the horizon.
Anticipation surrounding a potential spot Litecoin exchange-traded fund (ETF) is believed to be a significant factor driving the recent surge in Litecoin’s price. The U.S. Securities and Exchange Commission (SEC) has expressed receptiveness to a proposal from Canary Fund to create such a product, sparking optimism among investors. Many are hopeful that approval for this ETF could happen before the end of 2025, which several analysts interpret as a sign that Litecoin may be on the brink of a more prominent uptrend.
In connection with this, Nasdaq has filed paperwork with the SEC to list ETFs for CoinShares’ XRP and Litecoin. If regulatory approval is granted, these ETFs could open new avenues for institutional investors to engage with Litecoin, potentially enhancing its liquidity and demand.
Despite this positive sentiment, technical analysis suggests that Litecoin may be poised for a pullback before experiencing additional gains. The Relative Strength Index (RSI), a crucial technical metric reflecting price movement velocity, currently measures 54. Although this figure does not indicate that Litecoin is overbought, the RSI has steadily risen since February 4.
An RSI reading above 70 typically signifies that an asset is overvalued and may be due for a short-term correction. As such, while the price of Litecoin could continue to increase, it may also encounter potential volatility and corrections in the near term.
The upcoming weeks are expected to be pivotal for the outlook of Litecoin’s price trajectory. If optimism regarding the ETF continues to gain traction and market conditions remain stable, Litecoin could aim to test higher resistance levels, with immediate resistance identified at $123. A further target could be around $130, the level reached on January 31.
Conversely, should conditions turn overbought and trigger a correction, investors may identify support around $115, or potentially lower at $98, before a possible resurgence. As institutional interest rises and speculation around the ETF swirls, Litecoin is certainly a cryptocurrency that warrants close monitoring.