Key Takeaways
For the first time since Dec. 17, the price of Litecoin (LTC) has again hit the $120 mark. This price recovery was due to several macroeconomic factors.
First, recent reports emerged that incoming U.S. President Donald Trump may sign executive orders that could alter the SEC’s policies in favor of the crypto market.
Additionally, an encouraging Consumer Price Index (CPI) report indicating reduced inflation has contributed to the surge in crypto prices, including Litecoin (LTC), which has seen its price rally by 17%.
Beyond these, Litecoin-specific developments have played a crucial role in this uptrend. It is also likely that the rally might not be over. Here is why.
A key factor that impacted LTC’s double-digit hike was the speculation that it could be the first cryptocurrency to get exchange-traded fund (ETF) approval under the Trump administration.
According to Bloomberg analyst James Seyffart, Canary Capital, one of the applicants for the ETF, has amended its S-1 filing. The S-1 is the foundational registration form required by the U.S. SEC for projects that meet the agency’s criteria before it can list certain financial products.
Therefore, the Litecoin ETF filing appears to be inching towards potential approval.
“Canary Capital just filed an amended S-1 for their Litecoin ETF filing. No guarantees — but this might be indicative of SEC engagement on the filing. Still no 19b-4 filing yet though,” Seyffart revealed on X (formerly Twitter)
Following the report, on-chain data from Santiment showed that Litecoin’s volume surged by 300%. Yesterday, Jan. 15, Litecoin’s trading volume was less than $450 million.
As of this writing, that figure has risen to $1.62 billion. This increase in volume indicates rising market interaction with LTC. If sustained, this could help gather strength for the uptrend, and Litecoin’s price might trade higher within a short period.
Furthermore, findings from CCN reveal that additional positive developments have contributed to Litecoin’s recent price surge and could continue to influence its price action.
A notable one is the activity of large LTC holders. According to Santimen’s data, the balance of addresses holding between 1 million and 10 million coins was 8.28 million on Jan. 14.
That number has increased to 8.50 million today, indicating that these holders purchased an extra 220,000 coins within the last two days. If this kind of accumulation continues alongside the external events around LTC, then the cryptocurrency’s price might continue to jump.
Litecoin’s price has broken away from its consolidation phase on the daily chart. Also, the Chaikin Money Flow (CMF), which slid below the zero midpoint on Jan. 9, has climbed to the positive region.
The CMF uses the price and volume to confirm if a cryptocurrency is in an accumulation phase or distribution. When it is positive, it indicates buying pressure is dominant, while a negative CMF reading indicates rising distribution.
Hence, the current reading confirms the accumulation mentioned above. LTC might break above the 0.786 Fibonacci level if this trend continues at $126.45.
Once validated, the next psychological level for the cryptocurrency to reach would be around $150.
However, if the coin fails to breach the resistance at $126.45, it might not climb to $150 in the short term.
In that scenario, the cryptocurrency’s value will likely drop to $87.22 at the 0.382 support floor.