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

Litecoin rose to a two-month high following news that a spot Litecoin ETF has filed with the U.S. Securities and Exchange Commission.

Litecoin (LTC) increased by 7.2% over the past day, changing hands at $71.52 on Wednesday, October 16, reaching its highest price since the end of July.

LTC 24-hour price chart – October 16 | Source: crypto.news

This latest rise reflects a 15% increase from its monthly low, with Litecoin’s market cap rising from $4.6 billion on October 3 to over $5.36 billion at the time of writing.

The bullish momentum was also reflected in the futures market, where open interest in LTC futures contracts reached $170 million, a multi-month high. This increase in open interest indicates strong investor demand and increased interaction with the asset.

ETF filings fuel Litecoin rally

The main catalyst behind Litecoin’s rise is the announcement that Canary Capital, a crypto-focused investment firm, has filed with the SEC for a spot Litecoin exchange-traded fund. If approved, this ETF will give both retail and institutional investors direct access to Litecoin, making it easier for them to invest in the cryptocurrency without the need to hold the asset directly.

Since the announcement, the token has gained over 9%, reaching a two-month high of $72.79.

In addition to ETF news, broader market sentiment also played a role in Litecoin’s price increase.

The crypto fear and greed index, a widely followed gauge of market sentiment, rose to a greed reading of 77, from a fear high of 38 last week. This shift reflects an improving outlook for the crypto market overall, an outlook that Bitcoin further supports. (BTC) recently climbed above $67,000, which brought gains to other altcoins such as Ethereum (ETH) and Solana (SOL).

Historically, altcoins like Litecoin tend to perform well during periods of increased optimism and increased market confidence in Bitcoin. According to CoinMarketCap data, the community sentiment towards Litecoin is quite positive, while X investors showed a similar outlook.

According to analyst ZAYK Charts, LTC broke out of a descending channel on the 1-day chart; This is a pattern that typically signals an uptrend. ZAYK now expects the token to rise to $100 in the short term, representing a 28.5% increase from its current price.

A pseudonymous trader explained that they had accumulated 0.1% of Litecoin’s total supply as part of a long-term investment strategy. This investor noted Litecoin’s durability and cited the Lindy Effect (the theory that the longer an asset survives, the more likely it is to continue to exist) as justification for their confidence. They also believe that when the current “meme-coin” bubble bursts, capital will flow back into established cryptocurrencies that will stand the test of time, such as Litecoin.