Litecoin (LTC) emerged as one of the best-performing cryptocurrencies on March 23, surpassing its top-ranking rivals Bitcoin (BTC) and Ether (ETH).
Litecoin attracts Bitcoin and Ethereum investors
LTC price rallied 5.5% to reach an intraday high of around $92.50. In comparison, the total crypto market capitalization (TOTAL) has risen 2.25% to $1.14 trillion, with BTC and ETH rising 1.79% and 1.42%, respectively.
The Federal Reserve's 25 basis points (bps) rate hike on March 22 appears to be the key driver behind Litecoin beating its crypto rivals over the past 24 hours.
Notably, LTC price rallied over 15% versus BTC and about 14.5% versus ETH since the Fed announcement.
One reason could be that Litecoin has relatively underperformed the cryptocurrency market in March, dropping over 6.5% month-to-date (MTD) versus the crypto market's 9.35% gains.
Hence, traders likely saw this as a "buy the dip" opportunity for Litecoin with more upside potential, particularly as there were little to no other notable catalysts.
Whale accumulation ahead of Litecoin halving?
Meanwhile, on-chain data shows a rise in the Litecoin supply held by addresses with a balance between 1 million and 10 million LTC in March. Additionally, the share of supply held by addresses with a balance between 100,000 LTC and 1 million LTC has been dropping.
This suggests that the whales holding 10,000-1 million LTC have been accumulating Litecoin in March to enter the 1 million-10 million LTC holders' cohort.
Litecoin halving euphoria
A halving event occurs when the rewards for mining new blocks get cut in half.
Previous halvings in Bitcoin and Litecoin markets have preceded extended bull runs. Therefore, the next Litecoin halving, scheduled for August 2023, could also produce a similar bullish outcome.
Independent market analyst Rekt Capital noted that the euphoria around the Litecoin halving may have influenced traders to buy LTC in the face of a "market-wide dip."
$LTC is showing strength meanwhile most of the market struggles on this market-wide dip
Important not to forget about the #LTC Halving this coming August 2023#BTC #Crypto #LITECOIN https://t.co/otWMSUAYV9
— Rekt Capital (@rektcapital) March 22, 2023
What's next for LTC price?
From a technical perspective, Litecoin looks ready to undergo a price correction in the coming weeks.
Related: Ethereum faces 6-month lows versus Bitcoin — Will ETH price rebound?
Notably, LTC/USD is testing its multi-month descending trendline resistance for a potential pullback, similar to what transpired in May and November 2021.
A decisive bearish reversal could have LTC test its previous support line near $47.50 as the downside target, down about 45% from current price levels.
Conversely, a breakout above the descending trendline resistance may push LTC price toward the $105-140 price range.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.