Litecoin (LTC) Price Prediction: Market Top Not Here As Anticipation Builds Ahead of SEC Ruling

Litecoin (LTC) price has formed a bullish structure after falling below $70 on April 9. This comes as anticipation is building over a potential U.S. Securities and Exchange Commission (SEC) ruling on a spot ETF today, May 5.

Key Levels to Watch

Litecoin price has been trading within an ascending channel on the daily chart, although it has yet to challenge the key $100 psychological level. This bullish setup emerges just as the SEC prepares to deliver its verdict on the Canary Capital Litecoin ETF application later today.

A closer examination of the chart shows that the Chaikin Money Flow (CMF) is flirting with the zero signal line. This was after the CMF experienced a drop into the negative region.

The rise in the CMF reading indicates increasing buying pressure, which is supported by the Relative Strength Index (RSI). As of this writing, the RSI has risen to 58.49, signifying bullish momentum around Litecoin’s price.

If this trend continues, LTC’s market value could breach the resistance at $94.63 as long as the support at $81.43 holds.

LTC Price Could Enter Fresh Price Discovery Phase

Timing is also crucial, as regulatory clarity via a potential ETF approval could be the catalyst LTC needs to enter a fresh price discovery phase.

However, if the SEC decides to postpone its decision or opts for a rejection, Litecoin price could face a correction. In such a scenario, LTC might test the support at $70 again.

In the short term, if the bulls succeed in pushing LTC price above the channel resistance at $94.63, the next resistance level is at $100. A breakthrough above this level could open the door for a rally towards the 350-day MA at $172.

Conversely, if the bears manage to break the channel support at $81.43, LTC price could continue to decline towards the next support level at $70.

Litecoin Touches Weighted Sentiment Highs Ahead Of Anticipated ETF Decision

Broader crypto market sentiment has improved ahead of the decision. According to Santiment, Litecoin’s Weighted Sentiment was negative on May 3.

Today, that reading has increased to 0.29.

According to the crypto analytics platform, "our analysis blends the volume of social mentions with the emotional tone, providing a clearer picture of overall crowd sentiment."

A negative reading suggests that there are more bearish remarks surrounding the asset. However, in this case, the positive sentiment score indicates growing bullish comments around LTC, as many are optimistic about a potential green light from the regulatory agency.

In other news, a report by Goldman Sachs has warned that a failure by the SEC to approve a spot Bitcoin ETF this year could lead to "significant outflows" from the U.S. equity markets into cryptocurrencies.

The investment bank noted that in the past year, about $3 trillion has flowed into the S&P 500, driven by low interest rates, quantitative easing, and government spending. However, Goldman Sachs believes that these trends are now reversing.

With interest rates expected to peak this year and the Federal Reserve winding down its bond purchases, Goldman Sachs anticipates outflows of around $1.5 trillion from the U.S. equity markets in the next 12 months.

This will leave cryptocurrencies as a potential investment destination for those seeking to diversify their portfolios.

"While we do not expect crypto to attract outsized flows in the near term, we note that any outsized pessimism on U.S. equities in the second half of 2023 could lead to opportunistic flows into crypto, in our view," the investment bank wrote.

According to Goldman Sachs, a failure by the SEC to approve a spot Bitcoin ETF by the end of the year could spark a "significant shift in investor preferences" towards cryptocurrencies.

"Given the outsized attention on Bitcoin in the media and investor community, we believe that a missed approval this year could lead to greater outsized pessimism on U.S. equities and optimism on crypto, which could drive opportunistic position-taking in the latter at the start of 2024."

The investment bank predicts that if the SEC approves a Bitcoin ETF by December 2023, it could lead to an increase of about 5 to 10 percentage points in Bitcoin's price over the next six months.

"In our view, a Bitcoin ETF approval by 4Q23 could lead to a 5-10 percentage point appreciation in Bitcoin prices over the 6x1 rolling 6-month period."

However, Goldman Sachs believes that even if the SEC approves a Bitcoin ETF, it is unlikely to have a significant impact on the S&P 500 in the short term.

"While a Bitcoin ETF approval would be a positive development for the crypto ecosystem, we do not expect it