The Litecoin price popped in the overnight session after a series of positive news. The LTC price is trading at $180, which is the highest it has been since September 19. It has risen by more than 30% from its lowest level in October. This trend brings its total market capitalization to more than $12 billion.
Bitcoin and Litecoin correlation
The performance of the Litecoin is likely because of the close correlation that exists between Litecoin and Bitcoin. Data compiled by MacroAxis shows that the correlation coefficient between the two cryptocurrencies is about 0.94%. This simply means that the two digital currencies tend to move in the same direction.
Therefore, the Litecoin price jumped partly because Bitcoin rallied to more than $55,000 in the overnight session. The rally was because of news that Soros Fund Management had bought some Bitcoin. This is a fund that manages funds for George Soros, one of the richest men on earth. The news means that there is a possibility that other wealthy individuals had invested in Bitcoin.
The LTC price also rose after US Bancorp announced that it had started offering custodial services for digital currencies like Litecoin and Bitcoin. This was positive news since it showed that more institutional investors were becoming more interested in digital currencies. So, what next for the LTC price?
Litecoin price prediction
The four-hour chart shows that the Litecoin price has had a strong comeback in the past few days. The token has formed what looks like an inverted head and shoulders pattern. In price action analysis, this pattern is usually a bullish signal.
At the same time, the price has moved above the important 50-day and 25-day moving averages and is approaching the important 38.2% Fibonacci Retracement level. Therefore, in my view, I suspect that the price will keep rising in the near term. This will likely see it rise to the next key resistance at $206, which is along the 23.6% retracement level. This price is about 15% above the current level.