Litecoin (LTC) rebounds thanks to increased retail demand - Is the rally sustainable?

Litecoin (LTC) has surged 3% so far on Wednesday, amid booming demand for cryptocurrencies with listed ETFs, after Vanguard Group officially approved third-party ETFs on its platform. Derivatives data shows strong demand, even from large-wallet investors, reinforcing the recovery momentum in the falling wedge pattern and opening up further upside potential.

Vanguard’s ETF Move Boosts Litecoin Derivatives Demand

Litecoin, one of the blue-chip cryptocurrencies with an ETF, is seeing strong gains after Vanguard Group opened access for investors to cryptocurrency markets through third-party ETFs. This decision makes the Canary Litecoin ETF (LTCC) more accessible to cautious investors, promising the potential to attract new capital inflows into digital assets.

However, data from Sosovalue shows the Litecoin ETF recorded net inflows of zero in the first two days of the week, keeping total net inflows at $7.67 million.

Litecoin ETF Data | Source: Sosovalue

Meanwhile, the Litecoin derivatives market is heating up with surging demand: open interest (OI) in futures contracts rose 4.41% in 24 hours, reaching $440.26 million. The increase in futures positions reflects a new “risk-on” sentiment from investors. The clearing of large short positions further bolsters optimism, with $753,910 in short liquidations over 24 hours, far surpassing long liquidations at just $29,330.

Litecoin Derivatives Data | Source: CoinGlass

Additionally, data from CryptoQuant shows large investors—often referred to as whales—are increasing their average order size. The appearance of large buy orders from whales in Litecoin futures indicates strong confidence and could continue to drive market demand.

Litecoin Futures Market Indicators | Source: CryptoQuant

Technical Analysis: Litecoin Shows Upside Potential as Momentum Turns Positive

Litecoin continues to rebound from the support line formed by the lows of October 17 and November 4, signaling the start of an upward cycle within the falling wedge pattern. The upper trendline, connecting the highs of October 10 and November 9, remains the key resistance level to watch.

The path of least resistance for LTC is currently toward the 50-day exponential moving average (EMA) at $92.94, followed by the 200-day EMA at $99.51. If the coin breaks above the 200-day EMA near the resistance line, it would confirm a clear breakout from the falling wedge pattern.

LTC/USDT Daily Chart | Source: TradingView

Momentum indicators on the daily chart also support an uptrend. The RSI is at 45, showing a V-shaped recovery from oversold territory to neutral, indicating weakening downward pressure and the potential for bullish momentum to resume if RSI crosses above neutral. The MACD is also approaching a bullish crossover above the signal line, signaling a positive momentum shift.

However, if Litecoin loses momentum, key support levels lie at the November 4 low ($79.68) and the December 1 low ($74.66), which could help limit downward pressure.

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