Why has Litecoin increased in value today?
Litecoin (LTC) price rose today, hitting a new two-week high despite an underperforming cryptocurrency market.
On March 27, the price of LTC rose to $99 USD, up 9.25% in the last 24 hours. The crypto market has decreased by 1.15% in the same period. Still, Litecoin is outperforming the broader crypto market on a year-to-date (YTD) timeframe, as shown below.
Let's discuss the main reasons behind Litecoin's price rally today.
Litecoin traders are taking a $60 million supply of LTC.
Litecoin's current price increase appears to be a normal response to market volatility, often as previously underperforming coins re-enter circulation.
Notably, on March 5, the Litecoin market saw more than 600,000 LTC tokens – worth more than $60 million – return to circulation after being untouched for at least 5 years, the largest daily jump on record, according to Glassnode data.
The price of LTC fell more than 19% on the same day but has since gained 37.25%, indicating that the Litecoin market is suddenly flooded with the one-time dormant token. Today's price rally is part of that recovery.
Interestingly, the absorption of renewed LTC tokens is similar to what it was before the 2017 bull run.
In the year On December 1, 2017, the price of LTC began to adjust after the reform at 150,100 LTC tokens (~$150 million), which is the maximum until March 27, 2024. 420 dollars
Based on fractal analysis, LTC may be poised for a relative price increase in the near future.
Coinbase Litecoin future app
LTC's price rally will take further cues from the possible launch of Coinbase's cash-backed Litecoin futures contracts in April.
On March 7, Coinbase Derivatives filed an application with the US Commodity Futures Trading Commission (CFTC), setting a target launch date for Litecoin – as well as Dogecoin (DOGE) and Bitcoin Cash (BCH) – futures contracts from April 1.
A cash-backed Litecoin futures product could attract institutional capital to the LTC market, the market testified after the launch of CME Bitcoin futures in December 2017. This could be one of the main reasons behind LTC's recent gains.
Before Litecoin's network growth halved that of Bitcoin
LTC's recent gains are reflected in Litecoin's growing network health.
For example, Litecoin's hash rate reached an all-time high of 1.244 Peta-hash per second (PH/s) on March 22nd and has been climbing at the same rate ever since. This has increased by 40% so far in 2024, indicating that proof-of-work (PoW) miners are devoting more computing power to mining and calculating the security of the Litecoin blockchain.
The rising hash rate shows miners' confidence in the profitability of cryptocurrency mining, especially when Bitcoin is about to halve for the fourth time in April, halving BTC mining rewards. In turn, this optimism encourages traders to hold or buy LTC, driving up its price.
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For example, the number of very rich Litecoin entities – at least 100,000 LTC – is increasing in 2024, indicating that a bull run is in store.
Technical analysis of LTC price
As shown below, Litecoin's rally picked up momentum after breaking above multi-year downtrend line resistance.
Two key indicators suggest that LTC may grow further. First, the weekly Relative Strength Index (RSI) remains in a neutral range of 30-70 and is trending higher. Second, an increase in trading volumes alongside the price's climb will show traders strong support for the move to the upside.
A bullish continuation issue could see the price of LTC rise to the 0.236 Fibonacci retracement line around $127.25 – 30% from current price levels – in April. Conversely, a pullback from current price levels could test the downtrend line resistance at $75.50 as support.
Support at $75.50 aligns with Litecoin's 50-week exponential moving average (50-week EMA; the red wave in the chart above).
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
