Litecoin Price Forms Bullish Flag as Odds for ETF Approval Increase

Litecoin has experienced a significant pullback to $85.98, down 20% from May highs. Despite this, optimism is growing regarding LTC ETF approval, with chances now at 76%. Whales are accumulating more Litecoin, and social dominance is increasing. Technical indicators show a bullish flag pattern, suggesting potential for price recovery towards $106.70 and possibly $140.

Litecoin (LTC) has recently seen a dip, losing nearly 20% from its high of about $106 in May, with current trading sitting at $85.98 as of Sunday. This downturn, occurring alongside similar drops in other altcoins like Cardano and Chainlink, has erased much of the progress made after its lows in April. Interestingly, the shift in price has occurred even as odds for a Litecoin ETF approval from the Securities and Exchange Commission (SEC) jumped to an impressive 76%.

The surge in optimism for an LTC ETF is largely due to Litecoin’s classification as a proof-of-work cryptocurrency, placing it in a similar category to Bitcoin (BTC). With Bitcoin already having ETF approvals, there’s considerable speculation that Litecoin could follow suit. Such an approval would likely draw increased investments from U.S. investors, a significant booster for Litecoin’s value.

Another notable factor supporting the potential for Litecoin’s price recovery is the continued accumulation by so-called whale accounts. Data from Santiment indicates that holders of 100,000 to 1 million LTC have increased their combined holdings from 25.8 million in mid-April to 27.8 million currently. This ongoing interest from significant investors could provide the necessary support for a price rebound.

Moreover, recent trends in Litecoin’s social dominance suggest a growing popularity among online communities. In mere days, its social dominance climbed from 0.512% to 0.734%, reflecting an uptick in discussions and interest across social media platforms. Such rising interest often correlates with price increases, which could be quite promising for LTC investors.

From a technical standpoint, Litecoin’s price chart reveals a complex story. After dropping to $63.30 in April, it managed to reach highs of $106.72 during a broader crypto rally. But, setbacks have occurred, with prices now tracking below both the 50-day and 200-day Exponential Moving Averages, indicating a bearish trend in the short term.

However, analysts have spotted the formation of a bullish flag pattern on the daily chart — a typically positive sign. This pattern, originating from the rise to $106.72 and tracing back to April’s $63.29 low, is currently represented by a descending channel. Should Litecoin manage to recover, the first significant resistance to watch will be at $106.70, an increase of around 25% from its current price. A successful breakthrough above that could set the stage for even more gains, potentially pushing prices toward the $140 mark, which was seen earlier this year.