Recently, there has been a gradual increase in the demand for Litecoin among institutional and retail investors, sparking a Litecoin surge in the market.
The altcoin market, which Litecoin, Ethereum, and Dogecoin lead, is gaining bullish momentum as the Bitcoin price teases to rally above the crucial resistance/support level around $68k. The price of Litecoin has increased by more than 12 percent in the past two weeks, reaching approximately $72.5 during the early European session on Friday, October 18, according to the most recent market data.
As a result, the mid-cap altcoin, which has a daily average traded volume of approximately $556 million and a fully diluted valuation of roughly $6 billion, has emerged from the horizontal consolidation. From a technical analysis perspective, the price of Litecoin, about the U.S. dollar, has maintained a strong support level of approximately $59 since August 2023.
Litecoin’s price has been trapped in a macro triangular consolidation since 2018, but it has recently approached the apex, indicating that an imminent breakout is on the horizon. Additionally, the third largest crypto assets secured under the proof-of-work (PoW) consensus significantly underperformed during the 2021 bull run.
Consequently, Litecoin has been classified as a subset of XRP and Monero (XMR), backed by Ripple Labs, due to their substantial underperformance despite widespread adoption.
Factors Contributing to the Price Explosion of Litecoin
More fund managers have been examining the altcoin space for similar products since the approval of the U.S. spot Bitcoin ETFs and Ether ETFs earlier this year. For example, Canary Capital applied to the U.S. Securities and Exchange Commission (SEC) earlier this week for a spot Litecoin exchange-traded fund (ETF).
The recent filing for spot LTC ETF by Canary Capital has confirmed the increasing demand for altcoin from institutional investors. Grayscale Investments has been providing its Litecoin trust to its clients for some time, and it currently has approximately $140 million in net assets under management. Furthermore, Fidelity Crypto has recently provided its clients with Litecoin services.
Consequently, the on-chain volume of Litecoin reached a 16-month high of approximately $3.97 billion, as evidenced by market data analytics provided by Santiment. The on-chain traded volume of Litecoin experienced a significant increase in tandem with a substantial increase in its online discussion on various social media platforms.
In the recent past, the Litecoin network has grown significantly as a result of significant partnerships. For example, Venmo, a payment processor supported by PayPal Holdings Inc (NASDAQ: PYPL), recently collaborated with MoonPay to facilitate the purchase of cryptocurrency, such as Bitcoin, Ether, and Litecoin, by U.S. customers.
In the interim, the Litecoin price breakout is also responding to the bullish crypto outlook of October, which is anticipated to persist in the forthcoming quarters. Additionally, the recent Fed rate cut has reinforced the bullish sentiment regarding crypto, which the evolving global economic outlook has influenced in anticipation of the upcoming U.S. 2024 election.
