Grayscale Buys a Litecoin Price Drop: Will LTC Rebound?

After the Fed’s FOMC meeting, crypto markets crashed, including the price of Litecoin (LTC). This drop is due to the Fed’s hawkish decision to reduce the number of rate cuts in 2025 from four to two as planned. Grayscale Investments appears to be making the most of this drop by purchasing LTC. Will this institutional-led buying frenzy, coupled with spot LTC ETF hopes, trigger a rebound for Litecoin?

Grayscale Buys LTC Dip, Will Litecoin Price Rebound Next?

Litecoin price is trading at $109 after the market-wide crash, down 25% from its highest level this year. This decline is mainly linked to the continued weakness of the crypto market, with Bitcoin Price Falls Below $100,000 for the first time in two weeks.

Despite this short-term crash, Grayscale Investments is buying the decline in LTC. Data compiled by CoinGlass shows the company purchased 2,230 LTC on Thursday, bringing its 30-day accumulation to over 41,100 coins. His total Litecoin holdings are now valued at over $220 million.

Is Spot Litecoin ETF on the way?

Grayscale’s purchases increase the likelihood that the company will file for a Spot Litecoin ETF in 2025. Just this week, Eric Balchunasthe head of ETF research at Bloomberg noted that an LTC ETF would benefit from an easy approval path due to its similarity to Bitcoin. If true, this event could catalyze a massive rise in the price of Litecoin.

Litecoin is a hard fork of Bitcoin and has some similarities such as halving and a fixed supply cap. The SEC also does not consider it a security, which would make it easier to approve as an ETF.

Grayscale’s accumulation of LTC is a good sign as it is one of the largest creators of crypto exchange-traded funds.

LTC Hash Rate Hits All-Time High

Meanwhile, Litecoin’s hash rate has reached an all-time high, a sign that mining activity is increasing. Its hash rate increased to 1.66 TH/s, above the 30-day average of 1.52k. Hash rate is an important number in cryptography that looks at the computing power achieved per second. A higher number indicates that the network is healthy and has a considerable impact on the price of LTC.

Litecoin mining difficulty has also increased over the past few months following its latest halving event. Additionally, the number of Litecoin addresses with balance has remained relatively stable at over 8 million over the past few weeks.

LTC Technical Analysis: Will Litecoin Bounce From Key Support?

The techniques suggest that the the value of the SLD could soon rebound. It fell to a low of $103, which was a notable level since it was its lowest level on December 9th. The coin also remained above the 50-day moving average, which provides substantial support.

This price is also almost 25% below the previous year-to-date high, which was the upper end of the cup and handle (C&H) chart pattern. A C&H is a popular bullish continuation pattern, so LTC is likely to rebound as traders embrace the new normal of a hawkish Fed. A move above $112.40 will confirm the bullish view and potentially propel it to the yearly high around $150 and possibly $200, if bullish momentum remains high.

Conversely, a drop below support at $100, a key psychological point, will invalidate the bullish view and indicate further decline in Litecoin price. Such a development could lead LTC to revisit $90, a key support level.