Over the past 48 hours, Litecoin (LTC) has experienced a significant 20% increase in its value, reaching above $132 following renewed speculation surrounding an ETF in the US.
Analysts from Bloomberg ETF, James Seyffart and Eric Balchunas, have estimated a 90% probability of LTC ETF approval by 2025.
Out of all the altcoin ETFs analyzed, LTC stands out with the highest chance of approval. Nevertheless, the ultimate deadline set by the SEC is October 2025.
The question now arises whether LTC will maintain its positive momentum based on the approval likelihood or if the current upward trend will lose momentum in the near future.
Litecoin Testing High Price Levels Once Again
Looking at the daily chart, LTC’s market behavior has been bullish, confined within the price bracket of $95 to $140 since the previous November.
Although the daily Relative Strength Index (RSI) has not entered the overbought territory yet, indicating that there is still potential growth based on ‘Bitcoin beta’ correlation.
However, unless Bitcoin surpasses the $100K mark, the $135 level (marked in red) for LTC could turn into a potential selling point. A potential sell-off may occur from swing traders who took advantage of the buying opportunity during the de-leveraging event of the past week, yielding them a 30% profit.
When observing the bigger picture on a weekly chart, the critical level for LTC in the near future would be $180.
During 2021, the $100-$180 range acted as a crucial zone before LTC surged further beyond $280.
More Than 73% of LTC Investors Currently in Profit
One other aspect to consider for speculative investors who are late to the game is the considerable amount of unrealized profit among LTC holders. Data from IntoTheBlock shows that at present, 73% of LTC investors are in a profitable position.
For context, LTC reached its previous peaks in December and March when profit margins stood at 84% and 72%, respectively.
This situation suggests that the continuous rally of LTC could face limitations if a large number of investors decide to secure their profits by selling off.
In summary, the discussions surrounding LTC’s ETF approval have presented a lucrative opportunity for traders. However, the long-term holders with substantial unrealized profits might hinder a sustained recovery in the short term if they start capitalizing on their gains.
Disclaimer: The viewpoints shared in this content are personal opinions and do not constitute professional financial, investment, or trading advice.