Litecoin (LTC) may be 60% below its December 4 high of $ 420, but that hasn’t stopped the futures open interest from hitting a record $ 584 million. This makes LTC the seventh largest cryptocurrency in terms of market capitalization, and it ranks third in derivatives after Bitcoin (BTC) and Ether (ETH).
As explained above, LTC futures have increased overall open interest rates by 285% over the past three months. It should be borne in mind that such an event is not necessarily positive, because a futures contract requires both a buyer (long term) and a seller (short term). However, this increased interest allows larger players to participate.
Another interesting development is the Chicago Mercantile Exchange (CME) Ether futures contract, which serves as an indicator that other cryptocurrencies will soon follow.
Litecoin is the third largest share in the Bitwise 10 Crypto Index Fund (BITW), and the assets managed by this fund recently exceeded $ 780 million.
The Grayscale Litecoin Trust (LTCN) is also adding an additional $ 210 million in assets under management issued to institutional investors. These rising numbers clearly show the potential of Litecoin.
Long still under water
By looking at the daily calculations, investors can better assess how traders are using leverage. Unexpected price swings tend to result in higher calculations than current trends such as Litecoin’s recent 15% rally to $ 174.
In the chart above, the larger green light represents purchases that ended abruptly on January 10, when the LTC price fell 32% in 18 hours.
On the other hand, on February 5, $ 164 closed the $ 564 sale at $ 56 million, but that still fell short of the $ 128 million drop in January.
Volume could not hold the last high
Litecoin’s failure to break the $ 186 mark on January 10 was followed by a drop in volume, indicating a lack of interest in the current level. Total LTC is down 12% over the past 30 days.
The current open futures interest rates of $ 584 million are significant compared to the average daily LTC trading volume of $ 980 million on the spot exchange.
In terms of price analysis, it looks like the price action of both Litecoin and Bitcoin Cash has been delayed by the downward and upward movement of Bitcoin. Retail and institutional traders may be familiar with this relationship.
Sellers should also consider Etheruem’s higher gas fees and increased bitcoin transaction costs, the rise in Litecoin’s popularity could be driven by investors looking for faster transfers and cheaper fees.
If Litecoin’s privacy features are finally implemented, it could finally put much-needed pressure on altcoin to break $ 200, and the targets close to $ 300 are not outrageous.