Litecoin price held steady and crossed the important resistance level at $117.30, its highest swing on January 6. It has soared to its highest swing since December 18, and about 140% from its lowest level in 2024. So, is the LTC token still a good investment, and will it rise by about 22% from the current level?
Why the Litecoin price is soaring
Litecoin price bounced back this week as most cryptocurrencies rebounded following the relatively encouraging US consumer inflation data.
According to the Bureau of Labor Statistics (BLS) the core consumer price index (CPI) fell from 3.3% in November to 3.2% in December. While that was a small retreat, it was an encouraging figure since it was the first month it had dropped since mid-last year.
Litecoin and other cryptocurrencies do well in periods of low inflation since it often leads to a weaker US dollar index (DXY) and bond yields. Analysts now anticipate that the Federal Reserve will embrace a dovish tone later this year if this trend continues.
The weak inflation data explains why other coins bounced back. Virtuals Protocol, Fartcoin, Algorand, Sonic, and Hedera Hashgraph were some of the best-performing coins.
Litecoin price also jumped after Reuters reported that the Securities and Exchange Commission (SEC) was considering making major changes in the crypto industry. The agency is planning to delay some of Gary Gensler’s enforcement measures as it creates friendly regulations.
These regulations will likely help the crypto industry. They could also include more crypto exchange-traded fund (ETF) approvals.
Analysts expect that Litecoin would be one of the top beneficiaries of more altcoin ETF approvals. Its approval would be easy because it is a Bitcoin fork, meaning that the SEC would not see it as a security.
In line with this, crypto ETFs have continued seeing substantial inflows this year. All spot Bitcoin ETFs attracted over $755 million in inflows on Wednesday.
Meanwhile, Litecoin is relatively cheap, with the Market Value to Realized Value Ratio falling to 1.13, down from this month’s high of 1.30. The MVRV is a popular indicator that is used to assess whether a cryptocurrency is cheap or expensive. A figure of less than 3.8 is a sign that a sector is undervalued.
LTC price analysis
Litecoin price chart | Source: TradingView
The daily chart shows that the Litecoin price bottomed at $50.43 in August last year and then bounced back to $146 in November. It then pulled back to $90 during the recent crypto crash.
Litecoin has moved above the key resistance level at $117.30, the highest swing on January 6 of this year. This was a crucial level since it was the neckline of the double-bottom pattern at $92.
Litecoin has remained above the 50-day and 200-day Exponential Moving Averages (EMA), which is a positive thing for the coin.
Therefore, Litecoin will likely continue rising as bulls target the next key resistance level at $146.97, its highest swing in November. That target is about 22% above the current level. On the other hand, a drop below the key support level at $100 will invalidate the bullish view.
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