Litecoin Hits Two-Week High Amid Broader Crypto Rally and Anticipation of Coinbase Futures Launch
Summary:
Litecoin (LTC) witnessed a price surge to a new two-week high amidst a general rally in the cryptocurrency market. LTC's value rose 9.25% to around $99 on March 27, largely due to the reintroduction of over 600,000 LTC tokens worth over $60 million into circulation. Additionally, the anticipated launch of Coinbase's cash-settled Litecoin futures contracts in April and Litecoin's record hash rate have contributed to the recent gains. The continuing bullish trend could see LTC's price rise to roughly $127.25 by April or retest the resistance of the descending trend line at $75.50 if the market downturns.
The price of Litecoin (LTC) ascended to hit a new two-week high today amidst an overall upsurge in the cryptocurrency market. On the 27th of March, LTC's market value experienced a 9.25% surge to approximately $99; however, the wider crypto market dipped by 1.15% in the same duration. Regardless, in comparison to the aggregated cryptocurrency market, Litecoin's year-to-date (YTD) performance remains less stellar.
Over 600,000 LTC tokens, having a combined worth exceeding $60 million, reentered circulation on March 5 after remaining inactive for a minimum of 5 years. This reintroduction marked the highest recorded daily inflow of Litecoin, based on Glassnode data. Following this reintroduction, LTC’s price witnessed a decline of over 19% on the same day but subsequently experienced a 37.25% recuperation. This goes to show that the Litecoin market has successfully assimilated the unexpected influx of previously dormant tokens, and today's price rally is a part of this recovery process.
Coinbase Derivatives lodged an application with the U.S. Commodity Futures Trading Commission (CFTC) in the hopes of launching cash-settled Litecoin futures contracts in April. The filing, done on March 7, also included futures contracts for Dogecoin (DOGE) and Bitcoin Cash (BCH), to commence from April 1. This development could potentially draw in institutional capital into the LTC market, similar to the aftermath of the introduction of CME Bitcoin futures in December 2017. This future outlook is likely a major contributing factor to LTC’s recent upswing.
The positive trend for LTC is also attributable to Litecoin's growing network strength. For instance, the potency of Litecoin's hash rate overshot to an unprecedented high of 1.244 Peta-hash per second (PH/s) on March 22 and has oscillated around the same mark since then, marking a 40% increase so far in 2024. The uptick in hash rate suggests miners' trust in the profitable nature of mining cryptocurrency, particularly as Bitcoin is on the verge of its fourth halving in April, which will halve the rewards from BTC mining.
Litecoin's surge in price has gained traction after surpassing its descending multi-year trendline resistance. The weekly Relative Strength Index (RSI) suggests the likelihood of LTC's imminent growth because it remains within the neutral range (30-70) and is trending upwards. Additionally, the simultaneous rise of trading volumes with the ascension in price indicates robust support for the upward trajectory from traders.
Should the bullish trend continue, LTC's rate could escalate to the 0.236 Fibonacci retracement line at about $127.25 — 30% higher than the current price — by April. In contrast, should the market face a downturn, the price could slide back to retest the resistance of the descending trendline at $75.50.
This price coincides with Litecoin's 50-week exponential moving average (50-week EMA). This report does not serve as investment advice or recommendations. Every trading and investment action possesses inherent risk, hence readers are encouraged to conduct their personal research before taking a decision.
Published At
3/27/2024 2:39:49 PM
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