Grayscale’s Litecoin Trust trades for tremendous premium and LTC price may follow

Grayscale's Litecoin Trust is trading with a considerable premium to spot prices. According to Grayscale Invest Bot, LTCN Premium hit 2398.6%, the highest among the Grayscale products. 

LTCN was launched in March; however, it became publicly available in August 2020. Before that, only accredited investors were able to participate in the trust. In Q3, the investments' inflow in the Litecoin Trust jumped 1,800%, grossly outperforming the rest of Grayscale's family. 

This strong momentum signals that cryptocurrency investors, including hedge funds, seek to increase their LTC exposure. According to Arcane Research, Grayscale products is the only way the US-based investors can safely participate in the cryptocurrency markets.

In lack of crypto ETFs, these publicly traded trusts are the only option for American savers to get access to crypto exposure via their 401k savings.

LTC/USD demonstrates bullish momentum

Meanwhile, at the time of writing, LTC/USD is changing hands at $67. The seventh-largest digital asset with the current market capitalization of $4.4 billion has gained over 6% on a day-to-day basis and nearly 11.5% in the last seven days.

LTC bottomed at $41.6 on September 27 and has been growing steadily ever since. The coin has regained the losses incurred during the August-September sell-off and stopped within a whisker of the August 17 high of $69.

Whales are buying Litecoins en masse

The coin-chain data supports the bullish scenario for Litecoin. According to the blockchain analytical company Santiment, the number of wallets holding from 10,000 to 100,000 coins has increased from 398 to 405 since November 12. Large investors' activity often serves as a precursor of strong market movements. 

Litecoin's holders' distribution

A sudden spike in the number of LTC whales can translate into an increased buying pressure and a significant price increase.

Meanwhile, the In and Out of the Money around price data show no significant barriers above the current price. A minor resistance sits on approach to $70 as only 22,000 addresses previously purchased 1.6 million LTC tokens around this psychological level. Once it is out of the way, the bulls won't face any significant resistance until $77.

Litecoin's In/Out of the Money Around Price data

On the downside, over 40,000 addresses purchased 1.6 million LTC between $63.3 and $65.5; a barrier the bears may have a hard time pushing through. However, once it is broken, a more substantial barrier of $60 will come into view. It is reinforced by over 114,000 addresses holding 3.7 million coins.

LTC/USD has little technical barriers on the way to the north

From the technical point of view, a sustainable move above $64 has increased the bullish potential and brought the recent high of $69 into view. Once this barrier is put of the way, the price may retest psychological $70 and continue growing towards $80. This barrier stopped the recovery in February 2020 and also reversed the trend in September 2019.

LTC/USD daily chart

On the downside, if the price moves below $64; the sell-off may be extended towards psychological $60 and $57. This barrier served as strong support in August and also became a jumping-off ground for LTC in November. A sustainable move below this area will invalidate the immediate bullish scenario and bring more bears to the market. The next downside target comes at $50.