Litecoin (LTC), one of the leading cryptocurrencies, has been making headlines with Litecoin price surge. The digital asset reached a three-week high of nearly $68.50 on September 19, 2023. But factors contributed to this uptick, and what does Litecoin price movement mean for the cryptocurrency community?

Market Rebound and Federal Reserve’s Upcoming Decision

The broader cryptocurrency market has been experiencing a rally, and Litecoin is no exception. The market is keenly awaiting the Federal Open Market Committee (FOMC) meeting scheduled for September 20, where the Federal Reserve is expected to pause ongoing interest rate hikes

This anticipation has fueled a market-wide rally, with Litecoin outperforming the market by gaining 3.85% compared to the broader crypto market’s 2% on the same day.

The U.S. dollar, which has a negative correlation with Litecoin, has been underperforming against a basket of top foreign currencies. This inverse relationship suggests that as the dollar weakens, cryptocurrencies like Litecoin are likely to gain strength. 

Technical indicators point to Litecoin price rebound

Litecoin’s recent gains are not just a fluke; they are backed by strong technical indicators. The cryptocurrency has been following a long-term ascending trendline since December 2018. After testing this trendline, Litecoin’s price bounced 18.5% within eight days, signaling a robust technical rebound.

Litecoin price

Image source: TradingView LTC/USD

Moreover, short liquidations have also played a role in driving up the price. On September 19 alone, short liquidations amounted to around $477,300, compared to only $87,850 worth of long positions being liquidated. This forced buying has contributed to Litecoin’s recent price surge.

Image source: Cointelegraph Tradingview LTC/USD

Whales and Utility: A Dual Boost

The trading volume for Litecoin has seen a significant increase, crossing $700 million recently. This has led to speculation that large holders, often referred to as “whales,” might be entering the market. 

Adding to Litecoin’s appeal is its real-world utility. A recent transaction where Litecoin was used to purchase an Omega wristwatch worth around $2,895 has spotlighted the cryptocurrency’s potential as a viable means of payment. This transaction serves as a testament to Litecoin’s utility, setting it apart from being merely a speculative asset.

Regulatory Challenges: A Cloud on the Horizon

Despite the bullish trends, Litecoin has hit a regulatory roadblock. The New York Department of Financial Services (NYDFS) has removed Litecoin from its list of approved virtual currencies. While this move has not immediately impacted Litecoin’s price, it poses a long-term risk, especially for traders based in New York.

Future Price Predictions: A Cautious Optimism

Technical analyses suggest that Litecoin has the potential to reach $78.50 in the coming weeks, a 16.5% increase from its current levels. However, this journey won’t be without challenges. Litecoin faces strong resistance at its 50-day, 100-day, and 200-day Simple Moving Averages, which stand at $70, $80, and $84 respectively.

Image source: Cointelegraph Tradingview LTC/USD

Litecoin’s recent price surge is a result of a confluence of factors, including market anticipation of Federal Reserve decisions, strong technical indicators, increased trading volume, and real-world utility. However, looming regulatory challenges could act as a dampener on its growth prospects.