The Litecoin price continues to consolidate at a crucial resistance level as investors wait for the eventual approval of a spot LTC ETF. The coin has wavered around the resistance level at $125 since the start of the year, and technicals suggest that it may stage a strong comeback soon.
Litecoin Price Forecast: Technicals Suggest a Rebound is Likely
The weekly chart shows that the LTC price traded at $127 on Thursday morning. This is inside the range where it has been stuck since the year started.
Litecoin has formed an ascending channel near its upper side. It has also moved slightly above the 50-week Exponential Moving Average (EMA), a sign that bulls are in control.
Litecoin price has formed a bullish flag-like chart pattern, a popular continuation sign. It has also moved to the 23.6% Fibonacci Retracement level. Therefore, Litecoin only needs a catalyst to push it above the upper side of the channel. Such a move will confirm a bullish breakout, with the next level to watch being the 38.2% retracement level at $184.15, up by over 45% from the current level.
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The bullish LTC price forecast will become invalid if it moves below the key support at $95, which is at the middle level of the ascending channel. Such a drop will point to further downward momentum to $75.
LTC ETF Odds, Falling Inflation, Whale Activity
Litecoin has numerous catalysts that may push its price higher in the near term. First, there are rising odds that the Securities and Exchange Commission (SEC) will approve spot LTC ETs, which will lead to more demand. The agency has no reason to reject such an ETF since it has already approved a spot Bitcoin ETF. Litecoin is a Bitcoin hard fork.
Second, as shown below, Litecoin’s inflation rate has dropped to 1.67% as the mining difficulty has jumped. Also, the number of holders has continued to rise, possibly as investors anticipate the approval of the ETF. A combination of high demand and low inflation is a bullish sign for a coin.
Further, there are signs that Litecoin is seeing whale demand. One whale accumulated over $130 million LTC tokens in the past few weeks. Whale transactions are usually bullish because these investors are usually more sophisticated and experienced than normal day traders.
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