Litecoin Price Soars: What’s Behind the Surge Today?

Litecoin (LTC) has experienced a surge in price, reaching a two-week high, as the wider cryptocurrency market sees a rally. In the past 24 hours, LTC has risen by 9.25% to approximately $99. Litecoin is still lagging behind the rest of the market on a year-to-date basis. The recent increase in LTC’s price can be attributed to the absorption of a large supply of previously inactive coins. Over 600,000 LTC tokens, worth over $60 million, reentered circulation after being untouched for at least five years. This sudden influx of tokens caused LTC’s price to initially drop by 19%, but it has since rebounded by 37.25%, resulting in today’s price rally.

Interestingly, the absorption of these revived LTC tokens is similar to what happened before the 2017 bull run of the cryptocurrency. In 2017, LTC’s price started correcting after the revival of around 150,100 LTC tokens, and it later rebounded by over 400% to reach a record high of $420. From a fractal analysis perspective, this suggests that LTC may experience a similar price surge in the near future.

Another factor contributing to the recent gains in LTC’s price is the potential launch of cash-settled Litecoin futures contracts by Coinbase. Coinbase Derivatives has filed an application with the U.S. Commodity Futures Trading Commission (CFTC) to launch futures contracts for Litecoin, as well as Dogecoin and Bitcoin Cash, by April 1. The introduction of cash-settled Litecoin futures could attract institutional capital to the LTC market, just as the launch of CME Bitcoin futures did in 2017.

Litecoin’s network health has been booming, which has also contributed to its recent gains. The hash rate of the Litecoin blockchain reached a record high on March 22 and has remained at that level since. This indicates that miners have been dedicating more computational power to mining and securing the Litecoin network. The increasing hash rate reflects miners’ confidence in the profitability of cryptocurrency mining, particularly as Bitcoin’s halving in April approaches. This optimism encourages traders to hold or buy LTC, driving up the price.

From a technical analysis perspective, LTC’s rally gained momentum after it broke above its multi-year descending trendline resistance. The weekly Relative Strength Index (RSI) remains within the neutral range of 30-70 and is trending upward, indicating potential for further growth. The increase in trading volumes alongside the price ascent signals strong support from traders. If the bullish trend continues, LTC’s price could rise by 30% to around $127.25 by April. If the price retreats, it may test the descending trendline resistance at $75.50 as support, which aligns with Litecoin’s 50-week exponential moving average.

Celinka Lujan

Celinka Lujan

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