Litecoin price rose today, reaching its highest level in two weeks amidst a broader cryptocurrency market rally. On March 27th, LTC’s price increased by 9.25% over the last 24 hours to around $99. The crypto market showed a 1.15% decrease during the same period. However, as shown below, Litecoin is still underperforming the broader crypto market year-to-date (YTD).
Why Is Litecoin Rising?
Litecoin’s current price uptrend appears to be a classic response to market dynamics triggered by the re-entry of large amounts of previously inactive assets into circulation. According to blockchain data analytics platform Glassnode, on March 5th, the Litecoin market witnessed the return of over 600,000 LTC tokens valued at over $60 million after being untouched for at least five years, marking the highest daily increase on record.
LTC’s price dropped over 19% on the same day but has since recovered by 37.25%; this indicates that the Litecoin market has absorbed the sudden influx of once-dormant tokens. Today’s price rally is also part of this recovery. Interestingly, the absorption of reactivated LTC tokens resembles the pattern seen before the cryptocurrency’s 2017 bull run.
On December 1, 2017, LTC’s price began to correct following a revival of approximately 150,100 LTC tokens valued at the second-highest level on record, $150 million, as of March 27, 2024. The cryptocurrency then surged over 400%, reaching a record high of $420. From a fractal analysis perspective, LTC may be poised for a similar price surge in the near term.
Litecoin and the Futures Market
LTC’s price rally is further fueled by hints of a potential launch of cash-settled Litecoin futures contracts by Coinbase in April. Coinbase Derivatives applied to the US Commodity Futures Trading Commission (CFTC) on March 7th, aiming to launch futures contracts for Litecoin, Dogecoin (DOGE), and Bitcoin Cash (BCH) starting April 1st.
A cash-settled Litecoin futures product could attract institutional capital to the LTC market, as seen with the launch of CME Bitcoin futures in December 2017. This is likely one of the main reasons behind LTC’s recent gains.
