Litecoin price has done well since August last year, helped by the rising odds of a spot LTC ETF jumped. It has risen by about 127% from its lowest point in August last year, making it one of the top cryptocurrencies. So, will a spot Litecoin ETF help to boost its prices this year?
Will a LTC ETF Approval Boost Litecoin Price?
Litecoin price has risen in the past few months as the odds that the Securities and Exchange Commission (SEC) will approve a spot LTC ETF jumped. A Polymarket poll with $19,000 in funds places the odds of this approval to 84%, up from 42% in January.
It makes sense why the SEC would approve a spot Litecoin fund since it is similar to Bitcoin, which the agency does not deem to be a security. Litecoin emerged as a Bitcoin hard fork and is a proof-of-work coin.
An ETF approval should, in theory, lead to a higher Litecoin price. However, it is unclear whether the upside will be strong for the long term.
Current data shows that Wall Street investors are mostly interested in Bitcoin ETFs. These funds have attracted over $40 billion in inflows since their approval. On the other hand, Ethereum ETFs have only received $3 billion since their approval in September last year. This is a sign that Ether is not having as much demand as predicted. Litecoin, which is a less popular altcoin than Ethereum, would likely have weaker inflows.
The weak ETH ETF inflows have also affected its price, which has jumped by less than 30% from its lowest level in September.
LTC Price Analysis: Weekly Chart Points to a Rebound
The weekly chart suggests that the value of LTC has remained in a consolidation phase in the last three years. It has remained inside the support at $40 and the resistance at $114. This could be a sign of accumulation as the accumulation/distribution indicator has continued rising.
An accumulation phase is usually followed by the markup, where demand outstrips supply, leading to FOMO. This view is supported by the fact that Litecoin remains above the ascending trendline that connects the lowest swings since 2022 and the 50-week moving average. It has also formed a bullish flag pattern.
Litecoin target levels
Therefore, Litecoin price may surge ahead and shortly after the LTC ETF approval, and get to the 50% retracement level at $228. Such a move would be a 102% increase from the current level. It will then drop as investors sell the approval news.
On the other hand, the bullish LTC price forecast will become invalid if the coin drops below the support at $80, the lowest swing this month.
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