Litecoin rallies 11% amid spot ETF application and improving market sentiment

Litecoin surged to its two-month highs following the news of a spot Litecoin ETF filing with the U.S. Securities and Exchange Commission.

Litecoin ltc -3.25% rose 7.2% over the last day, exchanging hands at $71.52 on Wednesday, Oct. 16, its highest price seen since the end of July.

Litecoin (LTC) has experienced a notable rally, reflecting a 15% increase from its recent low. As of now, Litecoin’s market capitalization has risen from $4.6 billion on October 3 to over $5.36 billion. This uptick is a part of a broader bullish momentum that has also been evident in the futures market, where open interest for LTC futures contracts surged to a multi-month high of $170 million. The increase in open interest points to strong investor demand and growing engagement with Litecoin.

ETF Filing Sparks Litecoin’s Price Surge

The primary catalyst behind Litecoin’s recent price surge is the announcement that Canary Capital, a crypto-focused investment firm, has filed for approval with the U.S. Securities and Exchange Commission (SEC) to launch a spot Litecoin exchange-traded fund (ETF). If the SEC approves this filing, the ETF would provide both retail and institutional investors with direct exposure to Litecoin without the need to hold the cryptocurrency directly. The news of the ETF filing triggered a 9% surge in Litecoin’s price, pushing it to a two-month high of $72.79.

Broader Market Sentiment Fuels Litecoin’s Rally

Alongside the ETF news, broader market sentiment has also played a role in boosting Litecoin’s price. The Crypto Fear and Greed Index, which measures market sentiment, shifted from a fear level of 38 last week to a greed level of 77. This significant shift suggests a growing optimism in the market, which is reflected in the positive performance of major cryptocurrencies, including Bitcoin (BTC), which recently surged above $67,000, and altcoins like Ethereum (ETH) and Solana (SOL).

Historically, altcoins such as Litecoin tend to perform well when market sentiment improves and investor confidence in Bitcoin rises. Community sentiment around Litecoin has been notably positive, as reflected in data from CoinMarketCap, and traders on X (formerly Twitter) share a similar outlook.

Technical Analysis and Price Predictions

On the technical front, analyst ZAYK Charts notes that Litecoin has broken out of a descending channel on the 1-day chart, a pattern often associated with a bullish reversal. ZAYK now expects Litecoin to climb to $100 in the short term, a 28.5% upside from its current price.

Long-Term Investor Confidence

In addition to the technical analysis and broader market factors, a pseudonymous trader revealed they have accumulated 0.1% of Litecoin’s total supply as part of a long-term investment strategy. The trader highlighted Litecoin’s durability and referenced the Lindy Effect, which suggests that assets that have survived over time are more likely to persist in the future. This investor believes that once the current meme-coin bubble deflates, capital will flow back to more established cryptocurrencies like Litecoin, which has a proven track record.

Litecoin’s recent rally is driven by both fundamental developments—such as the spot ETF filing—and a favorable shift in market sentiment. As Litecoin’s price continues to rise, it is also benefiting from increased interest from futures markets and long-term investors who view the cryptocurrency as a stable asset. With continued optimism in the broader market and technical signals pointing to further growth, Litecoin’s outlook remains positive for both the short and long term.