Litecoin (LTC) may be 60% below the December 2017 record of $ 420, but that has not stopped the open interest in futures contracts from reaching a record high of $ 584 million. This makes LTC the seventh largest cryptocurrency by market value, and it ranks third in derivatives after Bitcoin (BTC) and Ether (ETH).
As shown above, total open interest in LTC futures has increased by 285% in the last three months. Note that such an event is not necessarily positive, because futures contracts require both buyer (long) and seller (short). However, this increased interest allows the most important players to participate.
Another interesting development is the recent listing of Ether futures on the Chicago Mercantile Exchange (CME), which indicates that other cryptocurrencies may soon follow.
Litecoin is the third largest holding in the Bitwise 10 Crypto Index Fund (BITW), with assets under management for the fund recently exceeding $ 780 million.
The Grayscale Litecoin Trust (LTCN) is also adding an additional $ 210 million in total assets originally issued to institutional investors. These increasing figures clearly show the potential of Litecoin.
Longs are still under water
By looking at the daily settlement, investors can better measure how traders use leverage. Unpredictable price fluctuations tend to clear higher than these persistent trends, such as Litecoin’s recent 15% rally to $ 174.
In the chart above, the largest green light represents long positions that were forced to close on January 10, when the LTC price fell 32% within 18 hours.
On the other hand, the February 5 rally threw to $ 164 $ 56 million from short positions, but it was still not compatible with the $ 128 million carrying pull in January.
Volume could not support the last rally
Litecoin’s inability to break the $ 186 mark since January 10 was followed by a volume decline, indicating a lack of interest in current levels. LTC’s total trading volume has decreased by 12% in the last 30 days.
The current open interest rate on futures contracts of $ 584 million is significant compared to LTC’s average daily trading volume of $ 980 million on the spot exchange.
In terms of price analysis, the price movements of Litecoin and Bitcoin Cash seem to lag behind the bearish and bullish movements of Bitcoin. Dealers and institutions may be familiar with this relationship.
Traders should also be aware that Litecoin’s extended increase may be driven by investors looking for faster transfers and cheaper fees due to Etheruem’s higher gas fees and rising Bitcoin transaction costs.
If Litecoin’s privacy features are eventually implemented, altcoin could eventually provide a much-needed boost to beat $ 200, and targets around $ 300 are not outrageous.