Litecoin prices approach critical levels, whale activity drops to 2022 lows

Grayscale applies to rename the Litecoin Trust to an ETF and list it on NYSE Arca

Grayscale Investments filed Amendment No. 1 to its S-3 registration statement on September 11, requesting the U.S. Securities and Exchange Commission (SEC) to convert its Litecoin Trust to a spot exchange-traded fund (ETF) and list it on NYSE Arca under the code LTCN. The issuer plans to rename the tool to Grayscale Litecoin Trust ETF after registration takes effect and listing review is approved.

The move is not a new fund, but a conversion of an existing trust. Currently, Canary Capital operates the first spot Litecoin ETF in the United States. The conversion is aimed at eliminating the spread between over-the-counter transactions and net asset value, rather than opening up new markets.

Price rebound and technical analysis

LTC prices have recovered about 72% of their decline after a summer sell-off, trading close to US$53.62. The emergence of this regulatory catalyst coincides with a period when the chart trend has strengthened.

Judging from the technical chart, the daily trend has turned upward in the past six weeks. LTC fell from a June high of US$59.36 to a low of US$39.29 at the end of August, a drop of 34%. It then gradually built a higher low and regained its footing above the basic support and moving averages. The current price is $53.62, and buyers have recouped about 72% of the summer decline.

The moving averages show bullish signals: prices are above the 20-day moving averages ($51.60), 200-day moving averages ($50.44) and 50-day moving averages ($48.38). The 20-day moving average is directly below the price, forming a moving support floor. The Relative Strength Index (RSI) was 61.57, with room before hitting the 70-level that usually marks overbought markets, indicating positive momentum but not excessive stretching.

Key prices and resistance levels

The following key points determine the short-term trend:

• $54.62 (resistance/trigger level): This is the 0.236 Fibonacci retracement level, the high of the band and the top of the rising channel. The three indicators point to the same price and form the ceiling.
• $53.62 (current price): lies between defended support and triple confirmed resistance.
• $51.60 (first support level):SMA20 is at 0.382 Fibonacci level ($51.69), forming a reinforced support floor.
• $49.32 (second support):0.5 Fibonacci level overlaps with the SMA200 region ($50.44).
• $46.95 (failure level): If the daily close is below the 0.618 Fibonacci level, it means the recovery has failed.

Large holdings fall to bottom of the 2022 cycle

On-chain data shows that the number of Litecoin addresses held with values between $1 million and $10 million and more than $10 million has fallen back to levels seen at the bottom of the 2022 cycle. This shows a significant decrease in large-scale participation.

analyst Joao Wedson pointed out that this contraction occurred during periods of deep reset, signaling sluggish whale activity rather than a guaranteed reversal. The derivatives market also reflects this, with open interest amounts of $385.14 million as of September 13, within the low range of $1.1 billion during last year's gains. Weak whale positions and lighter open interest describe a trading currency where the market is no longer crowded.

Outlook

Although Canary Capital launched its first spot Litecoin ETF (LTCC) on October 28, 2025, the first-day trading volume was only about US$1 million and there was no net inflow, which is in sharp contrast to the multi-billion-dollar offerings of Bitcoin and Ethereum. As a result, Grayscale's LTCN did not break any new records and did not create a backlog of demand. Its value lies in mechanically converting existing trust asset pools and reducing the premium or discount of shares to net asset value (NAV).

NYSE Arca filed a 19b-4 listing application as early as January 24, 2025, but still requires SEC approval to trade on the exchange. Bloomberg analysts believe that the probability of approval is close to 100%, given that the SEC's new general listing standards reduces discretion.

Bullish scenario: If the daily closing price breaks above US$54.62 with increased trading volume, it will confirm a channel breakthrough and open a clear path to the June high of US$59.36 (about 9%-10% above).

Bear scenario: If it is blocked at US$54.62 and breaks below US$51.60 support, the price will fall back towards the US$49.32 to US$50.44 range. If it closes below $46.95, LTC will return to the summer trading range and control will be returned to the seller.

The approval process for ETFs runs independently of daily charts, but affects the same market. Approval would allow LTCN to mechanically re-price to NAV, bringing Grayscale's trust assets into a listing format without creating new demand alone. A more severe test lies in the flow of funds: whether existing trust holders will continue to hold after conversion, or withdraw after being able to trade in NAV, and whether new funds will choose this packaging form rather than directly holding in cash. Behind all factors is the next halving scheduled for July 27, 2027, where block rewards will be cut from 6.25 LTC to 3.125 LTC, tightening new supply. This ETF race is racing against this clock.