Litecoin price has moved sideways in the past few days as traders wait for the upcoming exchange-traded fund (ETF) approval deadline. The LTC token was trading at $106.7 on Wednesday, a few points above this month’s low of $100.
Litecoin Price Has Formed a Risky Pattern Ahead of ETF Approval
The daily timeframe chart shows that the LTC price peaked at $134.30 on August 13 and then plunged to a low of $100 in September. It then bounced back a bit to the current $106.75.
The risk, however, is that the LTC token has formed a risky pattern. It has created the risky head-and-shoulders pattern. In this case, the head is at $134, while the shoulders are at $121.35, and the neckline is at $107.
Worse, the coin has formed a break-and-retest pattern by moving back to the neckline at $107. Retesting a crucial resistance level is one of the best approaches to confirm a continuation pattern.
Litecoin price has moved below the 50-day Weighted Moving Average, confirming a bearish breakout. Therefore, the most likely outlook is for Litecoin to plunge and move to the key support level at $90 in the coming weeks.
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LTC ETF Approval is Nearing
The main catalyst for the Litecoin price is that the Securities and Exchange Commission (SEC) has a deadline for the Canary LTC ETF this Thursday.
Polymarket odds that the agency will approve this fund and the conversion of the Grayscale Trust into an ETF stand at over 93%.
Analysts believe that the SEC has no reason to reject the LTC ETF because it has already approved those tracking Bitcoin. Litecoin is a cryptocurrency that resembles Bitcoin, with the primary difference being its limited supply.
Still, there is a likelihood that the Litecoin price will rise briefly after the approval and then plunge as the head-and-shoulders pattern suggests.
The coin may crash after the LTC approval due to a situation known as ‘buy the rumour, sell the news’. It implies that investors buy an asset ahead of a major event and then sell when it happens.
The other reason is that Litecoin ETFs may not attract substantial inflows like the other popular coins, like Ethereum and Bitcoin.
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