Litecoin (LTC) has gained notable traction in the market, rising by 5.15% in the last 24 hours to reach a price of $122. This surge is driven by mounting speculation regarding the potential approval of a Litecoin spot ETF, with some analysts suggesting a 90% likelihood of this happening. At a time when other major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) are experiencing stagnation or struggling with market uncertainty, Litecoin’s positive momentum stands out.

The technical setup for Litecoin is pointing toward a potential bullish breakout. A closer look at the 8-hour chart reveals that LTC has been consolidating within a perfect bullish pennant pattern after a recent uptrend. This consolidation indicates that Litecoin may be poised for a price breakout, which could push it above key resistance levels. The price action is testing the upper horizontal resistance zone of the pennant, which currently lies between the $130-$135 range.

If Litecoin can break through this resistance zone, analysts predict that the price could rally toward the $150-$170 level in the short term. Longer-term projections even suggest a price target of $250, depending on market conditions and the success of the ETF approval process. However, if Litecoin fails to maintain momentum and faces rejection at these levels, a price pullback is likely. In this scenario, LTC might test lower support levels, specifically in the $110-$100 range, before resuming its bullish trajectory.

One of the key factors contributing to Litecoin’s recent upward movement is speculation about the approval of a Litecoin spot ETF. The approval of a spot ETF would enable institutional investors to gain exposure to Litecoin in a more regulated and accessible manner. The anticipation around this potential approval is reflected in the increasing bullish sentiment among investors. A recent Bloomberg analyst report has suggested that the odds of a Litecoin ETF approval are at 90%, fueling optimism within the market.

On-chain metrics for Litecoin also provide mixed signals but lean toward the bullish side. According to data from Coinglass, Litecoin’s 24-hour Open Interest (OI) has risen by 4.8%, suggesting that more capital is being committed to LTC futures contracts. However, trading volume has dropped by 24.61%, which may indicate that investors are becoming cautious or are holding off from making large trades as they wait for a clearer direction in the market.

Further analysis by IntoTheBlock shows that 48% of Litecoin’s circulating supply is held by whales, a sign that major holders are confident in the future price potential of LTC. Additionally, 84% of total LTC holders are currently in profit, which suggests that most investors are content to hold their positions in anticipation of further price appreciation. The positive sentiment among investors is also reflected in Litecoin’s increasing social volume, which has risen from 100 to 128 in just one week, according to data from Santiment.

At press time, Litecoin’s Long-to-Short ratio stands at 1.5 across all timeframes, based on statistics from Coinalyze. This suggests that long positions are dominating the market, which could point to a continued bullish outlook in the near term.

However, the drop in trading volume raises a red flag. It suggests that fewer traders are actively buying or selling Litecoin, meaning that the market could be waiting for a catalyst, such as an ETF approval or a significant move in Bitcoin, before making a decisive move.

In conclusion, Litecoin’s current price action suggests that the cryptocurrency could be on the verge of a breakout, particularly if the ETF approval speculation materializes. While the technical indicators point to a potential rally, the decline in trading volume and mixed on-chain metrics highlight that caution is warranted. Investors should closely watch Litecoin’s ability to break through the $130-$135 resistance zone and whether the market can maintain its bullish sentiment in the coming weeks.