Litecoin price went vertical as it jumped for three consecutive days, reaching its highest level in almost a month.

The price of Litecoin (LTC) rose to $126, up 26% from its lowest level this week. It was the second-best performing coin after XDC Network (XDC). 

Litecoin’s surge is primarily attributed to rising hopes that the Securities and Exchange Commission will approve a spot LTC ETF by Canary Capital.

In an X post, Eric Balchunas, a Senior ETF Analyst at Bloomberg, stated that the SEC had sent comments to Canary. These comments suggest that the agency may ultimately approve the fund.

Litecoin, a Bitcoin fork, has a higher chance of approval compared to other projects like Hedera Hashgraph (HBAR) and Solana. Both HBAR and Solana are proof-of-stake networks with staking features, which the SEC often considers unregistered securities.

A Polymarket poll with nearly $10,000 in assets indicated that the odds of a spot LTC ETF approval rose to 60%, up from this week’s low of 40%.

Analysts remain optimistic that the SEC, under Paul Atkins, will adopt a more favorable stance toward crypto ETF approvals compared to Gary Gensler’s tenure.

However, it remains unclear whether a Litecoin ETF would attract significant capital from institutional investors. Data shows that institutional investors overwhelmingly prefer Bitcoin, which boasts over $120 billion in assets, compared to Ethereum’s $12 billion.

Litecoin price analysis

The daily chart shows that the LTC price has gone parabolic over the past few days. This rebound occurred after the coin formed a double-bottom pattern around $96. It has now surged above the neckline of this pattern at $117.17, its highest level on Jan. 6.

Litecoin is also supported by the 100-day moving average, while the Relative Strength Index (RSI) and the MACD indicators are both pointing upward. Therefore, the coin is likely to continue rising as bulls target the next key level at $146, which was its highest point on Dec. 5. This target represents an 18% increase from the current price.

A strategic bitcoin reserve has been a large part of the crypto discussion ahead of Donald Trump’s inauguration, but does the incoming 47th president have other tokens on his mind?

Solana’s SOL, Ripple’s XRP and Hedera’s HBAR are among the altcoins outperforming on Thursday, in part thanks to a NYPost report that Trump was “receptive” to the idea of creating an “America-first strategic reserve” of tokens including SOL, XRP and Circle’s USDC stablecoin.

SOL jumped over 8% to $217 following the report, while XRP continued this week’s advance to hit $3.35, just shy of its 2018 record price, per data source CoinGecko. HBAR, the native token of the Hedera Hashgraph network founded by the pseudonymous Texas-based firm, wasn’t mentioned in the story, but rallied more than 10% to its strongest price since early December.

That’s led the CoinDesk 20 Index to a 5% gain over the past 24 hours, sharply outperforming bitcoin’s 0.5% rise to just shy of $100,000.

Anticipation among crypto investors is building for Trump’s inauguration next week, and the potential announcement of first-day executive orders focusing on the digital asset industry. Trump promised during the campaign to position the U.S. as a leader in the crypto space including creating a national stockpile of bitcoin. Senator Cynthia Lummis also introduced the BITCOIN Act in July proposing to acquire the 5% of bitcoin’s supply, while some U.S. states are also exploring or have put forward legislation to create a reserve for the asset.

Not so fast

While some token holders might be salivating over the idea of the government buying cryptos other than bitcoin, market observers raised concerns.

“This is a ridiculous idea and will never happen,” Quinn Thompson, founder of hedge fund Lekker Capital, said in an X post.

“It’s not the government’s place to be making venture capital bets on altcoins,” Thompson elaborated to CoinDesk. “This rumor of a strategic reserve for other, non-BTC coins is another example of where people are taking what otherwise is a bad idea and running with it as fact.”

Anthony Georgiades, general partner of investment firm Innovating Capital, said while it’s “extremely positive” to promote U.S.-based innovation, the potential “nationalization of digital assets” could weaken efforts to decentralize blockchain economies.

“As it stands today, there’s truly only one token that is sufficiently and purely decentralized and that is bitcoin,” he said in an interview on the CoinDesk Markets Daily show. “These other projects all have the foundational strengths and ability towards a path to that level of decentralized ethos. This nationalization of digital assets might potentially weaken those efforts over time.”

Payments-focussed cryptocurrency XRP, which failed to set new price highs during the 2020-21 bull run due to regulatory struggles, is chalking out its fastest ascent in years, with derivatives tied to the token seeing record activity.

The cryptocurrency’s price has surged 50% to seven-year highs above $3 this month, extending the past quarter’s 240% rally, according to data source CoinDesk. Prices have gained 30% in the past seven days alone, lifting the market capitalization to $176.75 billion, the third-highest ahead of stablecoin tether.

XRP is witnessing the fastest observed rally since the altcoin boom of January 2018, according to a popular market analysis tool called the relative strength index (RSI). The measure oscillates between 0 and 100, measuring the speed and change of price movement over specific periods, typically 14 days or 12 months.

XRP’s 14-month RSI has risen to 92, the highest level since October 2017, indicating that the momentum observed over the past 12 months is the strongest over seven years.

Rookie traders would quickly point out that RSI readings above 70 indicate overbought conditions and potential for a bull breather or correction. However, that’s not necessarily the case, as RSI merely measures the speed of price changes over a specific period.

Indicators can continue to flash the so-called overbought reading longer than bears can stay solvent. As the law of motion states: an object in motion will remain in motion unless acted upon by an outside force.

“Crypto continues its recovery from Monday’s drop, with BTC pushing towards the $100k mark. The broader market is rebounding, with altcoins like XRP and XLM standing out. XRP has reclaimed the 3rd spot among cryptocurrencies and surpassed BlackRock’s market cap,” Diego Cardenas, OTC trader at digital asset platform Abra, said in a note to CoinDesk.

“This surge is driven by a growing number of partnerships, the launch of Ripple’s stablecoin RLUSD, and speculation about a potential spot XRP ETF,” Cardenas added.

Currently, XRP-specific factors combined with broader crypto market dynamics support the ongoing bullish momentum.

Take trading volumes for example. The spot market tally has tripled to over $23 billion in the past 24 hours, validating the price surge. Meanwhile, volumes in derivatives have more than doubled to $34 billion, according to data source Coingecko and Coinglass.

XRP’s perpetual futures open interest has surged to a record high of 2.34 billion XRP, with funding rates representing the cost of holding leveraged bets hovering around 13%. That’s well below the overheated 100% in early December, which signaled excess bullish leverage. In other words, the XRP market is much healthier and supports continued price gains.

Meanwhile, crypto market leader bitcoin has risen past $100,000, cheering the slowdown in the U.S. core inflation. The strength in bitcoin often translates to increased risk-taking in the broader crypto market.