Grayscale Buys Litecoin Price Dip: Will LTC Rebound?

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As a Seasoned Crypto Analyst with Years of Experience in Market Volatility and Institutional Buying Patterns:

Following the Federal Reserve’s FOMC meeting, crypto markets experienced a downturn, which included a decrease in the price of Litecoin (LTC). This fall was primarily caused by the Fed’s more aggressive stance on reducing the number of rate cuts anticipated in 2025, from four to two. Despite this market drop, Grayscale Investments appears to be taking advantage by purchasing LTC. Could the increased institutional buying, along with hopes for a spot Litecoin ETF, initiate a recovery for Litecoin?

Grayscale Buys LTC Dip, Is Litecoin Price Rebound Next?

As a crypto investor, I’ve noticed that Litecoin’s current trading price hovers around $109, marking a 25% dip from its highest point this year. This significant drop seems to be closely linked with the persistent slump in the broader cryptocurrency market. Notably, Bitcoin has dipped below the $100,000 threshold for the first time in two weeks, indicating a similar trend across the market.

Despite this short-term crash, Grayscale Investments is buying the LTC dip. Data compiled by CoinGlass shows that the company bought 2,230 LTC on Thursday, bringing its 30-day accumulation to over 41,100 coins. Its total Litecoin holdings are now valued at over $220 million.

Is Spot Litecoin ETF on Its Way?

The recent acquisitions made by Grayscale might indicate they plan to submit a proposal for a Litecoin-based ETF in 2025. This week, Eric Balchunas, the chief of ETF research at Bloomberg, suggested that an ETF focused on Litecoin could be expediently approved due to its resemblance to Bitcoin. If this prediction holds true, it could spark a significant surge in the value of Litecoin.

Litecoin shares certain characteristics with Bitcoin, such as a reduction in the rate of creation (halving) and a predetermined maximum limit on its supply. Additionally, the Securities and Exchange Commission has not classified it as a security, potentially facilitating the approval process for an Exchange Traded Fund (ETF).

The build-up of LTC (Litecoin) by Grayscale is a positive indicator, as they are among the leading developers of cryptocurrency exchange-traded funds.

LTC Hash Rate Hits All-Time High

Currently, Litecoin’s mining activity has spiked to unprecedented levels, as indicated by its hash rate reaching 1.66 TH/s. This figure surpasses the 30-day average of 1.52k, suggesting a significant increase in mining activity. In the world of cryptocurrency, the hash rate is crucial because it shows the network’s computational power per second. A higher hash rate suggests a robust network and can positively influence Litecoin’s price.

In recent months, the challenge of mining Litecoin has increased following its latest halving event. At the same time, the number of Litecoin wallets holding a balance has remained fairly constant, staying above 8 million in the last few weeks.

LTC Technical Analysis: Will Litecoin Rebound From Key Support?

Based on current market indicators, there’s a strong possibility that Litecoin (LTC) could recover soon. It plummeted to a record low of $103 on December 9, marking its lowest point since then. Interestingly, the coin has also consistently stayed above its 50-day moving average, offering significant reinforcement.

The current price is nearly 25% lower than the highest point this year (YTD) within the “cup and handle” chart pattern, a commonly used bullish continuation setup. This suggests that LTC may rebound as traders adapt to a more hawkish Federal Reserve. If it surpasses $112.40, this would strengthen the bullish outlook, potentially pushing it towards the annual high of around $150, and possibly even $200 if the bullish trend continues strongly.

Instead of this: “Conversely, a drop below the support at $100, a key psychological point, will invalidate the bullish view and point to more downside for Litecoin price.

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2024-12-19 14:20