Litecoin (LTC) has seen a remarkable surge of approximately 20% in the last 24 hours, reaching $120.50 as of 16 January. The rally comes in the wake of Canary Capital filing an amended S-1 form for its proposed spot Litecoin exchange-traded fund (ETF).

Litecoin ETF Sparks Investor Buzz

Canary Capital’s updated filing for a Litecoin ETF has fuelled speculation that Litecoin may soon become the next cryptocurrency to receive regulatory approval for an ETF in the United States. Bloomberg analysts have highlighted the importance of the 15 January filing, noting that it aligns with growing industry optimism about the US Securities and Exchange Commission (SEC) reviewing Litecoin-focused ETF applications.

Eric Balchunas, a Bloomberg ETF analyst, stated, “This development supports our view that Litecoin is the most likely candidate for the next crypto ETF approval.” However, he cautioned that a potential leadership change at the SEC could impact the timeline and decision.

The buzz around ETFs has already driven rallies in other cryptocurrencies like XRP, Solana, and Cardano. Litecoin appears to be riding a similar wave, with expectations of increased institutional adoption contributing to its recent price momentum.

Whale Activity Boosts Market Sentiment

Litecoin’s rally also follows notable accumulation by large investors. On-chain data from Santiment shows that wallets holding at least 10,000 LTC collectively added 250,000 LTC to their holdings between 9 January and 15 January. This accumulation, worth millions of dollars, reflects strong confidence among high-volume traders and whales.

Such renewed interest suggests growing optimism about Litecoin’s future prospects, particularly as ETF speculation continues to dominate headlines.

Technical Indicators Point to Further Gains

From a technical analysis perspective, Litecoin’s recent breakout move could lead to additional price gains in the coming weeks. LTC has successfully broken out of a descending triangle pattern, traditionally considered a bearish signal, but occasionally indicative of bullish continuation when the price moves above the upper trendline.

With this breakout confirmed by rising trading volumes, analysts predict Litecoin could target $157 by February, representing an additional 30% upside.

However, this bullish outlook hinges on LTC maintaining its position above the former resistance trendline. A pullback below the line would invalidate the bullish scenario, with immediate support likely around the 50-day exponential moving average (50-day EMA) at $105.

Institutional Adoption in Focus

The prospect of a Litecoin ETF could drive further institutional adoption, attracting a broader range of investors to the cryptocurrency market. As with previous ETF-related developments in the crypto space, market sentiment surrounding Litecoin appears to be shifting positively, with both retail and institutional participants showing renewed interest.

While uncertainties remain, particularly concerning regulatory approval and SEC leadership changes, Litecoin’s recent surge underscores the significant role ETFs could play in shaping the future of cryptocurrency markets.