Canary Capital's Spot Litecoin (LTC) ETF Application Delayed by the SEC, Requesting Public Input

The U.S. Securities and Exchange Commission (SEC) has pushed back its decision on Canary Capital's proposed spot Litecoin (LTC) exchange-traded fund (ETF), requesting public input on the proposal's regulatory compliance.

The announcement, made on Monday, May 5, marks the official deadline for the regulator to decide on the ETF application.

This delay follows a series of postponements for other cryptocurrency ETF applications, including XRP, Hedera, and Dogecoin. However, until the last minute, the Litecoin ETF had not been on the list of pending filings, which had sparked some hope among investors for a different outcome.

In its filing, the SEC specifically asked for comments on whether the proposal "is designed to prevent fraudulent and manipulative acts and practices or raises any new or novel concerns not previously contemplated by the Commission."

Canary Capital, founded by former Valkyrie Funds co-founder Steven McClurg in 2024, submitted its paperwork for the Litecoin ETF in October. The company reportedly received initial comments from the SEC back in January, leading some analysts to view this application more favorably.

"The @CanaryFunds Litecoin ETF filing is due for a decision (possibly a delay) by Monday 5/5," noted Wolfe Research analyst James Seyffart. "SEC went early & delayed a bunch of filings but not this one. If any asset has a chance of early approval it's Litecoin. Personally I think a delay is more likely but something to watch."

LTC Technical Analysis: Bearish Structure Identified

Litecoin price shows mixed market signals with a bearish swing structure forming on the daily chart despite a bounce from $63 in April. For the structure to turn bullish, LTC would need to close above the $96.5 swing high.

Short-term momentum shows some positive signals with the daily Awesome Oscillator (AO) highlighting upward momentum. However, the Accumulation/Distribution (A/D) indicator shows weak buying pressure over the past month, suggesting limited demand.

Price action shows Litecoin recently faced rejection at the $89.3 level, which is the 78.6% Fibonacci retracement level. The cryptocurrency appears to be forming a short-term range between $83.3 and $88.8.

Liquidation Levels and Future Outlook

Liquidation data shows $80.3 and $91.4 are key levels that could attract price movement. The $91.4 level is slightly more feasible as a near-term target considering current positioning.

Bloomberg analysts recently predicted that Litecoin would be the next cryptocurrency to receive ETF approval after Bitcoin.

With a $6.6 billion market cap, Litecoin is the native cryptocurrency of an open-source blockchain project whose code is derived from Bitcoin.

ETF experts are also closely watching how recently appointed SEC Chair Paul Atkins might handle cryptocurrency fund applications differently from his predecessor, Gary Gensler.

"It’s a huge variable. I think people are going to be watching very closely to see what happens with that. Because it’s going to be a big factor in how quickly or slowly these crypto ETFs get approved," said Bloomberg senior ETF analyst Eric Balchunas.

The lack of bullish conviction behind Litecoin suggests that a breakout beyond $90 remains challenging in the near term. Market expect the range-bound price action to continue in the coming days.

Bitcoin's short-term momentum will likely influence Litecoin's price movement. The current market structure suggests Litecoin may test both the $80.3 and $91.4 price levels before making its next major move.

The SEC's decision to delay and seek public comments on the Litecoin ETF application signifies the regulatory body is approaching cryptocurrency investment products with caution.

The regulator has been known for its extended review periods for digital asset funds.