Litecoin (LTC) has surged about 7.5% in the past 24 hours, reaching around $70.50 on October 16. Traders are flocking to the market as word spreads about Canary Capital’s recent application for a spot Litecoin exchange-traded fund (ETF).
LTC/USD 4-hour price chart. Source: TradingView
At local highs, LTC was trading at $72, its highest since July 2024.
Cryptocurrency market cheers filing of first Litecoin ETF
Asset manager Canary Capital has filed registration documents for a spot Litecoin ETF with U.S. regulators, according to an S-1 filing dated October 15.
Canary’s proposed ETF seeks to hold spot Litecoin, aiming to closely reflect the performance of the CoinDesk Litecoin Price Index (LTX). If approved, this ETF could provide investors with more direct exposure to LTC, further expanding the options for institutional participation in cryptocurrencies.
The news has prompted cryptocurrency analysts to issue an aggressively bullish outlook for Litecoin, especially amid the cryptocurrency’s underperformance.
This is a decline of more than 80% from its all-time high of around $413.65 in May 2021, compared to a decline of around 15% for the broader cryptocurrency market.
Total cryptocurrency market cap and LTC/USD weekly performance chart. Source: TradingView
For example, independent analyst 28 Crypto sees the ETF as a potential catalyst for a new bull cycle, combined with a technical scenario on the LTC/USD monthly chart.
According to the chart, Litecoin is trading within an ascending parallel channel that goes back several years, which is a bullish indicator signaling a potential breakout.
LTC/USD monthly price chart. Source: 28 Crypto
The price has bounced off key support levels and appears poised to surge into the $200-$300 range, with 28 Crypto highlighting its long-term Fibonacci extension target above $2,000.
Analyst Investing Haven also noted that Litecoin’s current trading range serves as a “buy the dip” opportunity, with the altcoin price likely to surge toward its June resistance target of around $88.
“Litecoin is trading within its expected range and a major ‘buy down’ zone between $57.85 and $61.15 could occur soon,” he added.
“This could be a solid long-term entry.”
The bullish outlook following Canary Capital’s Litecoin ETF filing is the biggest reason for LTC’s gains today.
Litecoin OI rises to 3-month high
Open interest in the Litecoin futures market rose to its highest level in three months following Canary Capital’s ETF filing update.
As of October 16, the number of outstanding futures contracts was approximately $258.94 million, up from $232 million a day earlier. Meanwhile, the market’s funding rate was positive at 0.262% per share.
Litecoin OI and funding rates. Source: Coinglass
This increase in open interest suggests that traders are holding their positions in anticipation of further price rises, which are often seen as a bullish signal.
Moreover, a positive funding ratio in the market indicates that traders are willing to pay a premium to hold long positions, strengthening upward momentum.
Litecoin falls short of a decisive breakout.
Litecoin’s rise today is part of a rally that began after testing the lower trendline of the dominant symmetrical triangle as support. As of October 16, LTC/USD is still stuck within the triangle range, suggesting immediate downside risk.
In particular, LTC failed to close above the resistance confluence consisting of the triangle’s upper trendline, the 200-day exponential moving average (200-day EMA, blue wave), and the 0.382 Fibonacci retracement line.
LTC/USD daily price chart. Source: TradingView
Additionally, the daily relative strength index (RSI) is currently hovering around 62, just below the overbought threshold of 70.
From a technical perspective, this suggests that the LTC price may face increased downside risk as further upward momentum may be limited as buying pressure wanes.
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That said, LTC’s downside target for October appears to be around $84, which is consistent with the triangle’s lower trendline and the 0.236 Fib line.
Nonetheless, a clear break above the resistance confluence could invalidate the bearish setup and set the price of LTC towards October’s 0.5 Fib line target of around $80.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.