Price Analysis

Grayscale Buys Litecoin Price Dip: Will LTC Rebound?

Litecoin price may stage a comeback as Grayscale Investment, a leading crypto investor, continues to accumulate LTC coins
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Grayscale Buys Litecoin Price Dip: Will LTC Rebound?

Highlights

  • Litecoin price has dropped sharply this week as the crypto sell-off continued.
  • Grayscale Investment is buying LTC and now holds coins worth over $200 million.
  • There are rising hopes that a spot LTC ETF will be approved in 2025.

After the Fed’s FOMC meeting, crypto markets crashed, including Litecoin (LTC) price. This drop is due to the Fed’s hawkish decision on reducing the number of rate cuts in 2025 from the anticipated four to two. Grayscale Investments seem to be making the most of this drop by buying LTC. Will this institutional-led buying spree coupled with spot LTC ETF hopes trigger a rebound for Litecoin?

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Grayscale Buys LTC Dip, Is Litecoin Price Rebound Next?

Litecoin price is trading at $109 after the market-wide crash, down by 25% from its highest level this year. This decline is mostly tied to the ongoing weakness in the crypto market, with Bitcoin price falling below $100,000 for the first time in two weeks.

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.

Grayscale Litecoin Assets
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Is Spot Litecoin ETF on Its Way?

Grayscale’s purchases raise the likelihood that the company will file for a spot Litecoin ETF in 2025. Just this week, Eric Balchunas, the head of ETF research for Bloomberg noted that an LTC ETF will get an easy approval path because of its similarity to Bitcoin. If true, this event could catalyze a massive rally for Litecoin price.

Litecoin is a Bitcoin hard fork and has some similarities like halving and a fixed supply cap. The SEC does not see it as a security too, which will ease its ETF approval.

Grayscale’s accumulation of LTC is a good sign because it is one of the biggest creators of crypto exchange traded funds.

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LTC Hash Rate Hits All-Time High

Meanwhile, Litecoin’s hash rate has jumped to a record high, a sign that mining activity is increasing. Its hash rate rose to 1.66 TH/s, higher than the 30-day average of 1.52k. Hash rate is an important number in crypto that looks at the computational power made per second. A higher number is a sign that the network is healthy and greatly impacts LTC price. 

Litecoin’s mining difficulty has also jumped in the past few months after its last halving event. Also, the number of Litecoin addresses with balance has held relatively stable at over 8 million in the past few weeks.

Litecoin Hash Rate

LTC Technical Analysis: Will Litecoin Rebound From Key Support?

Technicals suggest that the the value of LTC may bounce back soon. It dropped to a low of $103, which was a notable level since it was its lowest level on December 9. The coin has also remained above the 50-day moving average, which is providing substantial support.

This price is also nearly 25% lower the previous YTD high, which was the upper side of the cup and handle (C&H) chart pattern. A C&H is a popular bullish continuation setup, hence, it is likely that the LTC will bounce back as traders embrace the new normal of a hawkish Fed. A move above $112.40 will confirm the bullish view and potentially propel it to the yearly high around $150 and eventually to $200, if the bullish momentum remains high.

Litecoin Price Chart

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. Such a development could see LTC revisit $90, a key support level.

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Frequently Asked Questions

Why is Grayscale buying Litecoin?

Grayscale Investments is buying Litecoin likely because it expects to file for a spot ETF listing in 2025 when the new SEC is constituted.

Will the Litecoin price rebound?

It is still unclear whether the LTC price will bounce back after the recent dip. Still, it has strong technicals and fundamentals that will push it higher in the near term.

How high can LTC price get?

The most likely scenario is where the price of Litecoin bounces back and retests the year-to-date high of near $150.
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crispus

Crispus is a seasoned Financial Analyst at CoinGape with over 12 years of experience. He focuses on Bitcoin and other altcoins, covering the intersection of news and analysis. His insights have been featured on renowned platforms such as BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com.

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Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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