The cryptocurrency market is rebounding from a brutalsell-off, with Litecoin (LTC) spearheading the recovery. The coin’s pricesurged 16% in the past 24 hours, signaling renewed investor confidence. At the time of this publication, the digital asset hadsurged to $123, despite a 9% price decline in the past week. The anticipationsurrounding a potential Litecoin exchange-traded fund (ETF) is further fuelingoptimism. Trading Volumes and Onchain ActivityWhile trading volume remains subdued, on-chainactivity suggests increasing institutional and retail interest in the digitalasset. Despite lingering volatility, LTC has steadily regained ground after thebroader crypto market endured a $1.4 billion liquidation event.Currently, the crypto industry faces a significantsell-off, with the global market capitalization below the $3 trillion mark.Bitcoin trades at $87k, representing a 1% and 8% decline in the past day andweek, respectively. On the other hand, the second-largest cryptocurrency, Ethereum, is changing hands for $2,429 after a 10% drop in the last week. The declinefollowed a major hack suffered by crypto exchange Bybit, which resulted in recordlosses of up to $1.5 billion. Market analysts believe that Litecoin’s resiliencecould indicate a broader trend reversal for altcoins. One of the primarycatalysts behind Litecoin’s surge is the increasing likelihood of an ETFapproval. Bloomberg analysts James Seyffart and Eric Balchunasestimate a 90% chance that the U.S. Securities and Exchange Commission (SEC)will greenlight a Litecoin-based ETF, CryptoPotato reported.⚡️ Litecoin doesn’t typically get the social media hype of other top cap cryptocurrencies like XRP, Solana, Chainlink or Cardano. But on the back of some legitimate ETF rumors, it has quietly seen a big jump in value recently. From February 2 to February 19, 2025, Litecoin’s… pic.twitter.com/FSRpoKt2zd— Santiment (@santimentfeed) February 20, 2025Canary Capital has already filed for a Litecoin ETF,with the SEC acknowledging the application and beginning its review process. Ifapproved, the fund would allow institutional investors to gain exposure to LTCwithout directly holding the asset, potentially boosting demand.On-Chain Activity and Market SentimentLitecoin’s recent rally aligns with a surge inon-chain activity. According to Santiment, the coin has processed $9.6 billionin daily transaction volume over the past week, marking a staggering 243%increase from just five months ago. Despite its recent gains, Litecoin still facesresistance at the $140 level, with analysts predicting a potential rally to$170 if bullish momentum continues. The cryptocurrency has already climbed 46%between February 2 and February 19, far outpacing broader market gains.However, traders remain cautious, noting that marketsentiment could shift if the SEC delays or rejects the ETF proposal. For now,Litecoin’s resurgence places it at the forefront of the altcoin recovery, withinvestors closely watching for further developments in the ETF space.This article was written by Jared Kirui at www.financemagnates.com.