Litecoin (LTC) Back in the Spotlight as New ETF Filing Triggers Excitement

For years, Litecoin (LTC) stayed in the shadows. Once hailed as digital silver alongside Bitcoin's digital gold, the asset gradually lost its rank.

A new exchange-traded fund (ETF) filing has sent Litecoin (LTC) prices soaring by 14%. The proposal by Canary Capital to list the LTC ETF is now being considered by the U.S. Securities and Exchange Commission (SEC).

If approved, it would be the first time an altcoin has received the ETF green light. Bloomberg’s senior ETF analyst is optimistic, highlighting that the Litecoin ETF proposal has outshined rival filings in the queue.

The news of the ETF filing has sparked excitement among traders, especially in light of how Bitcoin (BTC) and Ethereum (ETH) rallies gained momentum following the approval of their respective ETFs.

As a result, traders are hopeful that a similar trend will unfold for Litecoin. At the time of writing, LTC is trading hands at $129.23. It began the day at $110.28, making good on a $19涨幅.

This rally also saw Litecoin reclaim its place among the best-performing altcoins. Trading volume has surged by 62% over the past 24 hours, now at $1.9 billion.

The world’s 15th-largest cryptocurrency by market capitalization saw a 68% rally last month, pushing LTC to a high of $217.69.

On average, the asset is expected to trade at around $170 throughout February. Notably, LTC is still trading 68% below its all-time high of $412, which was recorded in May 2021.

However, the ETF approval could act as a catalyst, especially if it leads to increased institutional interest in the asset.

On the other hand, if the SEC rejects the proposal, we may see a sell-the-news event, especially among traders who entered the market late.

suggesting that high-net-worth investors are accumulating the asset in anticipation of a potential ETF approval.

Meanwhile, derivatives markets are also reflecting optimism, with open interest in LTC futures increasing by 30% since the ETF filing. Funding rates are also positive, signaling that traders are expecting further upside in the asset’s price.

This speculation around the ETF approval is certainly boosting Litecoin’s bullish momentum. However, it's important to note that the SEC has been slow to approve cryptocurrency-related ETFs in the past, especially those tracking altcoins.

Moreover, broader market conditions could also impact LTC’s trajectory. If Bitcoin corrects or macroeconomic factors shift, Litecoin’s rally might stall. Hence, traders should pay close attention to volume trends and whale movements to gauge sustained buying pressure.