Litecoin Price Forecast: LTC Volatility Spikes 15% as Litecoin Founder, Charlie Lee Hints ETF Approval

Analysis:

Litecoin price consolidated above the $71 mark on Friday, Oct 25, up 6.5% in the last 48 hours. Amid speculations of an LTC ETF approval in the US, on-chain data trends show the recent price gains have coincided with an uptick in spot market activity.

Is Litecoin price on the verge of a $75 breakout?

Bulls Hold $70 Support as Crypto Markets Stumble

On October 17, US-based fund manager Canary Capital filed an S-1 application with the US SEC to launch the first-ever Litecoin (LTC) spot Exchange-Traded Fund (ETF).

Canary Capital’s LTC spot ETF application was initially met with mixed media reactions. After the approval of Bitcoin and Ethereum ETFs, similar applications for Solana and XRP ETFs earlier this year have failed to gain considerable traction.

However, on Oct 22, Litecoin Founder Charlie Lee expressed optimism that the SEC could approve the firm’s Litecoin ETF application as early as 2025. Recent LTC price action suggests this could spur more bullish momentum in the days ahead.

I’m excited to see the Litecoin ETF filing by Canary Capital. We are definitely seeing a lot of institutional demand for Litecoin. This is clear from the daily growth of the Grayscale Litecoin Trust with a price that is over twice the NAV. Given that Litecoin is a commodity that is very similar to Bitcoin, I hope to see the Litecoin ETF approved very soon.

Litecoin Founder, Charlie Lee, Oct 22, 2024

The green patch on the LTCUSD 4-hour chart above shows how Litecoin price surged 9.86%, from $69 to $72 within 3 days after the US SEC received Canary Capital’s LTC ETF filing on Oct 17.

That 3-day LTC price rally was truncated when BTC liquidations triggered a rapid downswing across the crypto markets on Oct 20.

However, following the Canary Founder’s confident statements on Oct 25, LTC price has witnessed another 6.5% surge in the last 48 hours as highlighted by the green-shaded portion of the chart.

Market Volatility Surges 15% on Canary Capital’s LTC ETF Application

Evidently, speculations surrounding the LTC ETF application have emerged as one of the main price catalysts in recent weeks.

Although media reports suggest the chances of an imminent approval are slim, crypto enthusiasts anticipate that a Donald Trump win in the upcoming US presidential elections could usher in a favorable outcome.

Confirming this narrative, a crucial on-chain indicator shows that trading activity has increased considerably within the LTC markets since Canary Capital’s ETF filing.

LTC market volatility has been on the rise since mid-October. The chart above shows that it increased from a monthly low of 35% to reach 40.67% on Oct 25. This indicates that the daily directional trading momentum within the LTC markets has increased by nearly 15% in the last 14 days, coinciding with the Litecoin price rally driven by LTC ETF speculations.

The current market dynamics hint at positive signals for LTC’s short-term price prospects for two key reasons:

1. Increased Volatility with Price Surge: When an increase in volatility coincides with a price surge, as observed in the LTC markets over the past 14 days, it signals growing bullish momentum. This partly explains why Litecoin price held firmly above the $70 support despite the broader crypto market’s bearish headwinds earlier this week.
2. ETF Filing Boosting Institutional Demand: The ETF filing signals growing strong demand from institutional investors. Considering that Bitcoin ETFs have attracted over $60 billion in inflows within the first 10 months of trading, a fraction of that could trigger a considerable increase in LTC prices and market capitalization in the long term.

Litecoin Price Forecast: Technical Indicators Hinting at $75 Breakout

Litecoin is currently experiencing an increase in volatility along with a mild-price surge. Typically, this could serves as a precursor for  major breakout towards the $75 territory.

Within the current market setup, if Litecoin holds above the $70 support, it is poised for a move toward $75 in the near term. Conversely, losing the $68.90 support could invalidate the bullish outlook and open the door to further downside toward $64.30.

Technical indicators further emphasize this positive Litecoin price forecast. With the Bollinger Bands widening amid a 6.5% upswing in the last 48-hours, LTC price appears poised for another leg-up towards $75.

Currently, the middle band (20-day MA) at $75.67 is the short-term resistance to beat. If Litecoin price can close above this level, it could mark the start of a prolonged breakout phase, with the $80 level as the next major bullish target.

More so, the Relative Strength Index (RSI) on the daily chart stands at 55.78, which is just below the overbought region. This indicates that while Litecoin is not currently overbought, there’s still room for a price increase.

In the event of a downswing the first support level to watch is $68.90 (lower Bollinger Band). If this level fails, Litecoin could slip further to $64.30. However, as observed this week, the $70 psychological level remains critical.